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Author: 


Gray,  Howard  Lev' 


Title: 


Wa^  time  control  of 
industry 

Place; 

New  York 

Date: 

1918 


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MASTER    NEGATIVE   # 


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Gray,   Hox^rard  Lcevi^^   1873  or  4-1945. 

V/ar  time  control  of  industry:   the  experience 
of  England  ...     New  York,  Macmillan,   1918. 

XV,   307  p.     19tfcn. 


1.  Industry  and  state  -  Great  Britain. 
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Columbia  (HnitJew^fti) 

THE  LIBRARIES 


GRADUATE 

SCHOOL  OF  BUSINESS 

LIBRARY 


From  the  library  of 

John  M.   Clark 


WAR  TIME  CONTROL 
OF  INDUSTRY 


WAR  TIME  CONTROL 
OF  INDUSTRY 


THE  EXPERIENCE  OF  ENGLAND 


0^^ 


THE  MACMILLAN  COMPANY 

N«W  YORK  •    BOSTON  -   CHICAGO  •   DALLAS 
ATLANTA  •    SAN   FRANCISCO 

MACMILLAN  &  CO.,  Limited 

LONDON  •  BOMBAY  •  CALCUTTA 
MELBOURNE 

THE  MACMILLAN  CO.  OF  CANADA,  Ltd. 

TORONTO 


BY 


HOWAP^•D  L..-GRAY 

PROFESSOR   OF  HISIOP.Y  IN  BKYS  MAWR  COLLEGB 


«      % 


k\  I 


ITftit  fork 

THE  MACMILLAN  COMPANY 

1918 


AU  rights  reserved 


-^^".^^  Vl/-c.J-i?/' 


COPYMOHT,    1918 

By  TME-iVf.40SfeII»LAN  COMPANY 


f  • 


.   •   «     I 


S«t  up  an/l  elcctrotyped.     Publislic^  March,  1918. 


1     I    t    .    •     » 
I       • 


Tohr)    m.  Clark 
JUN  18  1957 


-J 
o 


00 

CD 

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O 


PREFACE 


A  part  of  the  information  contained  in  the  following 
pages  was  gathered  for  the  Commercial  Economy  Board 
of  the  Council  of  National  Defense.     Much  of  it  is  not 

easy  of  access.  Despite  the  summary  character  of  the 
chapters,  therefore,  they  may  be  not  unacceptable  to  those 
who  are  interested,  as  all  during  these  days  must  be,  in 
the  industrial  activities  of  the  state.  Although  the  ex- 
periments in  governmental  control  of  industry  here  re- 
corded are  due  to  unusual  circumstances,  the  experience 
which  they  yield  will  scarcely  be  without  influence  upon 
the  future.  A  necessary  defect  of  any  account  written 
at  this  time  is  its  incompleteness.  The  outcome  of  the 
ventures  described  is  not  yet  known  and  the  end  of  the 
tale  remains  to  be  told.  Even  so,  the  beginning  may  be 
worth  the  telling. 

I  am  indebted  to  Dr.  Mary  Alice  Hanna  and  Professor 
William  Roy  Smith  for  assisting  me  in  revising  the  man- 
uscript. 

H.  L.  Gray. 
Low  Buildings,  Bryn  Mawr. 
December,  19 17. 


INTRODUCTION 


British  control  of  industry  during  the  war  has  passed 
through  three  phases.  The  first,  extending  over  some  ten 
months,  was  a  period  of  tentative  action,  the  Government 
taking  only  obvious  self-protective  measures;  the  second, 
lasting  for  nearly  a  year  and  a  half,  was  a  period  of 
determined  regulation,  the  Government  now  being  con- 
cerned to  increase,  the  output  of  munitions  of  war,  to 
secure  supplies  for  the  army  at  prices  below  those  of  the 
market,  and  to  regulate  shipping;  the  third,  beginning  at 
the  end  of  1916,  has  proved  to  be  a  period  of  stringent 
control,  governmental  regulation  of  the  production,  dis- 
tribution, and  consumption  of  food  being  its  marked 
characteristic.  The  doctrine  of  laissez  fake,  still  re- 
spected in  19 14,  had  by  the  end  of  19 17  passed  into  at 
least  temporary  oblivion. 

These  stages  in  the  growing  control  of  industry  are 
marked  by  corresponding  political  changes.  The  period 
of  hesitant  and  relatively  slight  control  coincided  with 
the  regime  of  the  Liberal  Cabinet  which  administered 
English  affairs  at  the  beginning  of  the  war.  In  June, 
1915,  this  Cabinet  was  enlarged  by  the  inclusion  in  it  of 
prominent  members  of  the  Opposition  and  became  the 
CoaHtion  Cabinet.  The  change  was  only  one  aspect  of 
the  general  desire  for  a  more  energetic  prosecution  of  the 


Vll 


Vlll 


INTRODUCTION 


1 


war,  which  at  the  same  moment  led  to  the  increased  mo- 
bilization of  industry.  A  year  and  a  half  later  it  was 
felt  that  the  Coalition  Cabinet  was  too  large  a  body  to 
act  as  an  efficient  executive  in  war  time.  In  consequence, 
there  was  set  up  in  December,  191 6,  the  smaller  War 
Cabinet,  which  has  since  had  the  immediate  responsibility 
for  important  administrative  measures.  A  more  thor- 
ough-going control  of  the  prices  and  consumption  of  food 
had,  it  is  true,  been  decided  upon  before  the  War  Cabinet 
was  constituted.  But  both  movements  w^ere  indicative 
of  a  new  attitude  toward  the  prosecution  of  the  war,  and 
the  War  Cabinet  accepted  and  carried  out  with  vigour  a 
policy  which  was  the  expression  of  its  own  convictions. 
This  third  political  and  industrial  phase  had  not  yet  come 
to  an  end  in  the  autumn  of  1917.  It  will  lend  unity  to 
the  following  chapters  to  consider  for  a  moment  the  char- 
acteristics of  the  periods  indicated. 

At  home,  as  at  the  front,  the  first  ten  months  of  the 
conflict  proved  to  be  a  time  of  hurried  and  somewhat 
inadequate  readjustment.  Apart  from  assuming  control 
over  such  supplies,  industries,  and  foodstuffs  as  were  es- 
sential to  military  needs  and  the  security  of  civilians,  the 
State  showed  itself  loath  to  interfere  in  the  economic  life 
of  the  nation.  Ships  were,  of  course,  requisitioned  for 
the  admiralty  and  the  military,  and  establishments  which 
could  easily  turn  out  munitions  were  enlisted  in  the  Gov- 
ernment's service.  Further  measures  were  few.  Most 
bold  and  immediate  was  the  taking  over  of  the  railways, 
the  first  comprehensive  essay  in  state  control.     Almost 


'I 


n 


INTRODUCTION 


IX 


as  prompt  were  the  measures  adopted  to  insure  adequate 
supplies  of  food.  Since  sugar  had  been  imported  very 
largely  from  enemy  countries  and  would  have  to  be  got 
henceforth  in  a  greatly  restricted  world  market,  the  Gov- 
ernment deemed  it  best  to  purchase  and  control  all  sugar 
consumed.  Wheat,  too,  it  appeared,  might  become  scarce 
unless  a  surplus  store  were  acquired.  The  Government, 
accordingly,  entered  the  foreign  market  as  a  purchaser 
and  bought  a  supply  which  before  the  year  had  passed 
proved  of  great  utility.  After  the  adoption  of  these 
measures  little  was  done  until  a  winter  and  spring  of  war 
made  clear  that  further  action  would  be  necessary. 

This  winter  of  1914-15  saw  a  marked  rise  in  the  price 
of  foodstuffs  and  coal.  As  a  result,  workmen  through- 
out Great  Britain  began  to  reason  that  there  should  be 
either  a  corresponding  increase  in  wages  or  an  effort  on 
the  part  of  the  Government  to  check  rising  prices.  Since 
many  producers  and  middlemen  seemed  to  be  reaping 
undue  profits,  charges  of  "  profiteering  "  were  now  heard. 
The  nervousness  of  labour  found  expression  in  a  demand 
for  war  bonuses,  and  after  February,  191 5,  these  were 
secured  from  employers  with  more  or  less  friction. 
Where  the  friction  was  great  the  Government  had  to  in- 
tervene, and  the  spring  months  of  191 5  were  marked  by 
vigorous  efforts  to  conciliate  labour  in  order  that  its 
active  co-operation  in  the  prosecution  of  the  w^ar  might  be 
secured. 

There  was  the  greater  need  of  harmony  now  that  the 
nation  was  beginning  to  realize  the  magnitude  of  the 


^  INTRODUCTION 

task  before  it.  Such  episodes  as  the  battle  of  Neuve 
Chapelle  and  the  loss  of  Przemysl  by  the  Russians  dem- 
onstrated the  imperative  need  of  abundant  munitions  of 
war.  Thereupon  began  a  campaign  for  the  complete  mo- 
bilization of  such  industrial  resources  as  might  be  directed 
toward  the  production  of  military  and  naval  supplies. 
It  was  initiated  by  the  Munitions  of  War  Act  of  June, 
1915.  the  conception  and  passage  of  which  may  be  said 
to  mark  the  beginning  of  the  second  industrial  period  of 
the  war. 

The  introduction  of  the  bill  in  Parliament  had  been 
preceded  by  conferences  with  representatives  of  labour. 
In  these  conferences  the  trade  unions  agreed  to  relax 
many  of  their  restrictions  and  to  permit  the  employment 
of  unskilled  workers,  but  they  exacted  one  concession  — 
the   requirement   that   employers'  profits  be   restricted. 
Such  restriction  the  bill  imposed.     On  the  other  hand, 
provisions  for  compulsory  arbitration  of  industrial  dis- 
putes and   for  the  securing  by  munitions  workers  of 
"  leaving  certificates  "  were  to  act  as  checks  upon  any  in- 
terruption of  work.     The  Defence  of  the  Realm  Act  had 
already  permitted  the  conversion  of  any  engineering  es- 
tablishment in  the  country  into  one  producing  munitions. 
Fortified  by  the  two  acts  the  Government  entered  upon 
a  period  of  munitions  making  quite  unprecedented,  and  a 
year  later  remarkable  results  could  be  announced. 

In  its  mobilization  of  capital  and  labour  for  the  pro- 
duction of  munitions  of  war,  the  Government  was  more 
happy  than  it  was  in  dealing  with  the  coal  miners.     This 


INTRODUCTION 


XI 


1 


large  and  influential  body  of  workingmen  refused  to  come 
under  the  Munitions  of  War  Act;  and,  when  the  Govern- 
ment  relative   to   a  threatened   strike   in   South   Wales 
endeavoured  to  enforce  the  measure,   industrial   revolt 
seemed  imminent.     Conciliated  for  the  time  by  the  per- 
suasion of  Mr.  Lloyd  George  and  securing  for  the  most 
part  their  demands,  the  South  Wales  miners  returned  to 
work.     At  the  end  of  1916,  however,  they  again  threat- 
ened to  strike,  and  this  time  the  Government,  unwilling 
to  see  necessary  supplies  imperilled,  assumed  control  of 
the  mines,  first  in  South  Wales,  soon  after  throughout 
Great   Britain.     Difficulties  with  the   coal  miners  thus 
marked  the  beginning  and  the  conclusion  of  the  second 
industrial  period  of  the  war. 

Still  other  features  than  the  production  of  munitions, 
the  conciliation  of  labour,  and  the  trouble  with  the  min- 
ers characterize  the  period.  In  purchasing  clothing  and 
leather  for  the  army  the  War  Office  soon  saw  itself  faced 
with  rising  prices  due  in  turn  to  a  precarious  supply  of 
raw  material.  In  the  course  of  1916  it  decided  that  the 
wool  clip  of  Great  Britain  should  be  acquired  and  at  the 
end  of  the  year  bought  also  the  far  larger  one  of  Aus- 
tralasia. Purchases  of  domestic  and  imported  hides, 
though  on  a  more  restricted  scale,  were  similarly  carried 
through.  To  secure  meat  supplies  for  the  army  at  a 
reasonable  price,  the  Government  in  the  spring  of  19 15 
was  forced  to  requisition  shipping  space  on  British  ves- 
sels plying  to  Australasia  and  to  the  Argentine.  It  was 
the    beginning    of    the    control    of    merchant    shipping 


I 


xu 


INTRODUCTION 


prompted  by  a  desire  to  influence  prices.  A  similar  form 
of  control  was  adopted  when,  after  freight  rates  for 
wheat  had  risen  immoderately  toward  the  end  of  1915, 
the  Government  diverted  ships  to  the  North  American 
trade  and  determined  what  profits  were  permissible.  By 
the  end  of  19 1 6  there  was  little  British  shipping  that  had 
not  been  requisitioned  or  was  not  controlled.  During 
the  same  year,  also,  measures  looking  toward  economy 
in  shipping  space  became  necessary  and  the  importation 
of  certain  bulky  commodities  was  restricted. 

It  was  toward  the  end  of  1916  that  public  criticism 
and  the  exigencies  of  the  shipping  situation  forced  upon 
the  Government  a  policy  of  still  more  stringent  control 
over  many  branches  of  industry.     Behind  all  lay  the  in- 
creased cost  of  living.     Complaints  about  this  had  been 
rife  ever  since  February,  191 5,  when  the  rising  prices  of 
necessities  first  became  oppressive.     In  the  summer  of 
19 1 5  the  price  of  coal  at  the  pit  head  was  limited  by  statute 
to  a  certain  advance  upon  pre-war  prices.     From  the  be- 
ginning of  the  war  the  Government  controlled  the  price 
of  sugar,  but  kept  it  very  high,  since  there  was  added  to 
a  considerable  initial  cost  a  heavy  war  tax.     The  price 
of  wheat  and  of  imported  meat  had  to  some  extent  been 
affected  by  the  Government's  control  of  ocean  freights. 
There  remained,  however,  the  possibility  of  fixing  max- 
imum prices  for  essential  foodstuffs;  and,  if  it  should 
appear  that  such  a  policy  might  discourage  the  British 
farmer   and    deter   him    from    production,    inducements 
to  agriculture  might  well  be  offered  in  compensation. 


INTRODUCTION 


XUl 


Upon  this  somewhat  hazardous  policy  the  Government 
ventured  after  November,  19 16.  At  that  time  the  cost 
of  the  principal  articles  of  food  as  compared  with  the 
cost  at  the  beginning  of  the  war  had  advanced  about  80 
per  cent.  Beginning  with  a  limitation  upon  the  prices 
which  might  be  charged  for  milk,  the  Government  in  the 
course  of  a  twelvemonth  fixed  maximum  prices  for  the 
most  important  articles  of  food.  In  the  case  of  bread, 
for  which  a  maximum  price  based  upon  the  cost  of  im- 
ported wheat  would  still  have  worked  hardship  for  a 
large  part  of  the  population,  a  price  below  cost  was 
eventually  established.  The  loss  would  be  made  good, 
it  was  explained,  by  a  subsidy  from  the  exchequer.  Con- 
versely, the  farmer  was  encouraged  to  plough  arable 
land  for  the  sowing  of  grain  by  the  guarantee  of  mini- 
mum prices  for  wheat  and  oats  during  a  series  of  years. 
Thus  with  one  hand  the  Government  tried  to  check  rising 
costs,  while  with  the  other  it  endeavoured  to  stimulate 
production. 

The  stimulus  to  production  was  one  method  of  escape 
from  what  was  to  prove  an  imminent  danger  of  1917,  the 
shortage  of  ocean  tonnage.  Much  British  mercantile 
shipping  having  been  requisitioned  from  the  beginning  of 
the  war,  the  activity  of  submarines  more  and  more  made 
serious  inroads  upon  the  part  that  remained.  Not  only 
was  it  essential  that  more  food  be  produced  in  Great 
Britain,  but  economy  of  consumption  became  imperative. 
In  various  ways  the  Government  set  itself  to  induce  peo- 
ple to  save  food.     Making  use  of  persuasion  at  first,  it 


XIV 


INTRODUCTION 


Stood  ready  at  the  end  of  19 17  to  resort  to  rationing  if 
necessary.  Indeed,  in  the  case  of  sugar,  rations  were 
imposed  at  the  end  of  the  year. 

Another  aspect  of  the  economy  forced  upon  Great 
Britain  during  the  year  was  the  resort  of  priority  schemes. 
Particularly  in  the  apportionment  of  steel  to  manufac- 
turers according  to  the  importance  of  their  products  from 
the  mihtary  or  national  point  of  view  and  in  the  similar 
allocation  of  wool  to  spinners  were  priority  rulings  in- 
troduced.    They    were,    indeed,    a   kind    of    rationing. 
Whereas,  however,  for  consumers  of  food  the  rationing 
is  impartial,  it  is  the  essence  of  priority  rationing  to  show 
favouritism.     Always  in  the  latter  the  manufacturer  of 
civilian   implements   or   stuffs  gets   least   consideration. 
All  energies  of  the  nation  are  concentrated  upon  the  pro- 
duction of  what  is  essential  for  the  war,  and  other  activi- 
ties receive  litde  consideration. 

The  following  chapters  have  been  arranged  to  show  as 
far  as  possible  the  successive  stages  of  governmental  con- 
trol over  industry.     First  to  be  subjected  to  it  were  the 
railways.     Munitions  works  and  the  labour  which  op- 
erates them  were  next  with  great  effort  directed  toward 
energetic  and  disciplined  production.     Coal  miners  and 
dealers  in  coal  proved  more  obdurate,  forcing  the  Gov- 
ernment to  take  over  the  industry.     The  administration 
of  wool  and  hides  was  assumed  in  order  to  secure  econo- 
mies in  government  purchasing  and  to  conserve  stocks. 
Upon  the  shipping  industry  depends  the  existence  of  a 
food-importing  nation ;  and  to  secure  supplies  at  reason- 


INTRODUCTION  XV 

able  rates  nearly  all  merchant  shipping  was  eventually 
requisitioned  or  put  under  blue-book  rates.  Finally,  in 
the  last  period  of  governmental  control,  food  was  made 
available  for  the  consumer  at  maximum  prices  and  pro- 
duction was  stimulated  by  the  promise  of  possible  sub- 
sidies to  the  farmer. 

What  may  be  the  permanent  significance  of  this  gov- 
ernmental control  of  industry  cannot  be  foreseen.  As- 
surance is  given  that  all  measures  are  temporary  and  that 
with  peace  the  conditions  of  peace  will  be  restored. 
What  will  have  been  created,  however,  is  precedent  and 
experience;  and  in  the  industrial  world  which  emerges 
from  the  war  these  may  have  more  importance  than  is  at 
the  moment  anticipated. 


CONTENTS 

CHAPTER  PAGE 

I    Introduction yii 

II    The  Railways i 

III  Munitions  and  Labour 14 

IV  The  Coal  Mines 61 

V    Wool  and  Woollens iqi 

VI    Hides  and  Leather 129 

VII    Shipping 140 

VIII    Food.—  Sugar,  Meat,  and  Bread     ....  167 

IX    Agriculture 249 

X    Conclusions  and  Comparisons      ....  269 
Index ^ok 


p.  D.  C. 
P.  D.  L. 
Cd. 

D.  F.  M. 
B.  T.  J. 
B.  T.  R. 
L.  T. 

L.  E. 
M.  G. 

E.  N. 
A.  R. 


ABBREVIATIONS 

Parliamentary  Debates,  Commons. 

Parliamentary  Debates,  Lords. 

Paper  by  Command. 

Defense  of  the  Realm  Manual. 

British  Trade  Journal. 

British  Trade  Review. 

London  Times. 

London  Economist. 

Manchester  Guardian. 

English  Nation. 

Annual  Register. 


ti 


WAR  TIME  CONTROL  OF 

INDUSTRY 


i 


i 


f 


THE  RAILWAYS 

On  August  4,  1914,  Great  Britain  was  at  war;  on 
August  5,  His  Majesty's  Government  assumed  control  of 
the  railways  of  England,  Scotland,  and  Wales.  It  was 
the  prompt,  almost  instantaneous  action  of  the  State  to 
secure  for  itself  command  of  the  arteries  of  traffic. 
Henceforth  administration  lay  with  a  committee  of  gen- 
eral railway  managers,  their  chairman  the  President  of 
the  Board  of  Trade. ^ 

In  accordance  with  the  Regulation  of  the  Forces  Act 
(1871)  under  which  the  Government  acted,  interposition 
involved  full  compensation  to  the  owners  for  loss  or  in- 
jury sustained,  the  amount  of  this  to  be  determined  by 
agreement  or,  if  necessary,  by  arbitration.  In  Septem- 
ber the  Board  of  Trade  issued  a  memorandum  announc- 
ing the  agreement  reached.  The  Government  undertook 
to  pay  to  the  companies  "  the  sum  by  which  the  aggre- 
gate net  receipts  for  the  period  during  which  the  Gov- 
ernment are  in  possession  fall  short  of  the  aggregate  net 

^  H.  J.   Jennings,   Home   Railways  during  the  War.    Nineteenth 
Century  and  After.    Apr.  1915. 


2  WAR    TIME    CONTROL   OF    INDUSTRY 

receipts  for  the  corresponding  period  of  1913."     If,  how- 
ever, the  net  receipts  of  the  companies  for  the  first  half 
of  19 1 4  should  turn  out  to  be  smaller  than  the  net  re- 
ceipts for  the  first  half  of  19 13,  the  sum  payable  should 
be  reduced  in  the  same  proportion.     The  Government's 
payment  together  with  the  net  receipts  of  all  the  com- 
panies was  to  be  distributed  among  them  in  proportion  to 
their  several  net  receipts  during  the  period  with  which 
comparison  was  made.     The  plan  in  short  was  the  sim- 
ple one  of  guaranteeing  to  the  railways  the  profits  which 
had  prevailed  during  the  immediate  past.     On  the  other 
hand,  the  arrangement  covered  all  special  services,  such 
as  those  in  connection  with  military  or  naval  transport, 
rendered  to  the  Government  by  the  companies ;  it,  there- 
fore, became  unnecessary  that  payments  be  made  for  such 
services.^     Not  only  did  the  railways  pool  their  net  traf- 
fic receipts  but  to  a  great  extent  they  pooled  their  rolling 
stock  as  well.     Arrangements  thus  made  for  public  ends 
have  persisted  with  slight  readjustments  during  the  war. 
Having  come  to  terms  with  the  owners  of  the  railways, 
the  Government  turned  to  the  men.     The  railway  em- 
ployes   of    Great    Britain    are    organized    in    two    large 
unions,  the  National  Union  of  Railwaymen  and  the  As- 
sociated Society  of  Locomotive  Engineers  and  Firemen. 
It  happened  that  a  scheme  of  conciliation,  worked  out 
between  the  unions  and  the  owners  at  a  Board  of  Trade 
conference  on  December   11,    191 1,  became  inoperative 
after  November  30,  19 14.     The  avoidance  of  readjust- 

2  B,  T.  J.,  Sept.  17,  1914,  p.  749. 


THE   RAILWAYS  3 

ment  and  possible  industrial  conflict  at  the  latter  date  was 
imperative.  The  unions  happily  showed  themselves 
ready  to  conclude  with  the  Government  in  October  what 
is  known  as  "  the  truce."  They  agreed  that  the  concilia- 
tion scheme  of  1911  should  remain  in  force,  the  men's 
representatives  on  the  existing  conciliation  boards  of  each 
of  the  several  railways  continuing  to  act.  The  railway 
companies  or  either  union  might,  however,  give  six 
weeks'  notice  to  terminate  the  agreement.  Otherwise  all 
existing  contracts  and  conditions  of  service  should  re- 
main operative.^  True  to  the  spirit  of  the  agreement, 
the  men  showed  public  spirit,  suspended  trade  union 
regulations,  worked  hard  and  overtime. 

The  first  occasion  for  a  readjustment  came  early  in 
191 5.  Owing  to  the  increased  cost  of  living,  the  men 
asked  for  an  advance  of  5  s.  per  week  in  their  wages. 
The  companies  ofl^ered  less,  and  the  outcome  of  several 
conferences,  supervised  and  directed  by  the  government, 
was  the  grant  of  a  war  bonus.  It  was  fixed  at  3  s.  for 
men  whose  wages  were  more  than  30  s.  a  week,  at  2  s. 
for  those  whose  wages  were  less.^  Mr.  A.  Bellamy, 
President  of  the  National  Union  of  Railwaymen,  in  his 
address  at  the  annual  conference  of  that  body,  hailed  the 
outcome  as  the  "  largest  and  widest  agreement  ever  nego- 
tiated by  any  union  for  the  benefit  of  its  members  in  the 
history  of  the  United  Kingdom,  if  not  of  the  world."  ^ 

3  P.  D.  C,  Aug.  15,  1917.     (L.  T.,  Aug.  16,  p.  8). 

*  Ibid. 

«L.  T.,  Je.  22,  191 5,  p.  5. 


4  WAR    TIME    CONTROL   OF    INDUSTRY 

But  the  triumph  was  not  so  much  over  unwilling  em- 
ployers as  over  an  embarrassed  government.  For  it  was 
the  Government  which  frankly  assumed  three-fourths  of 
the  £4,000,000  added  to  the  wages  bill.^  Indirectly  it 
assumed  the  entire  sum,  although  the  companies  agreed 
to  pay  25  per  cent,  of  the  increase.  This  was  in  return 
for  another  concession  from  the  Government.  The  lat- 
ter had,  it  will  be  remembered,  safeguarded  itself  in  its 
arrangement  with  the  companies  against  the  possibility 
that  earnings  during  the  first  half  of  1914  might  be  less 
than  during  the  first  half  of  1913.  This  contingency  de- 
veloped into  fact  with  the  publication  of  balance  sheets, 
the  northern  roads  having  suffered  just  before  the  war 
from  a  reaction  in  the  iron  trade  and  from  inactivity  in 
the  cotton  trade.  The  Government  would  have  been  en- 
titled to  reduce  its  payment  to  the  1914  basis,  i.  e.,  to 
have  decreased  it  by  nearly  3  per  cent.  Instead  it  stip- 
ulated that  the  companies  pay  25  per  cent,  of  the  war 
bonus  now  promised  to  the  menJ  Despite  this  apparent 
shifting  of  part  of  the  burden,  the  meeting,  directly  or 
indirectly,  of  this  first  demand  of  labour  for  increased 
wages  stood  forth  in  February,  19 15,  as  one  of  the  first 
fruits  of  governmental  control. 

Demands  of  the  kind  naturally  did  not  end  early  in 
191 5.  In  September  unrest  was  again  manifest  and  a 
certain  section  of  the  National  Union  of  Railwaymen 
urged  the  termination  of  "  the  truce."     Eventually,  at 

®  Jennings,  op.  cit. 

7  B.  T.  J.,  Apr.  22,  1915,  pp.  223,  224. 


THE   RAILWAYS  5 

a  meeting  between  the  executive  council  of  this  body 
and  the  representatives  of  the  companies,  the  war  bonus 
was  increased  from  3  s.  to  5  s.     More  ominous  was  the 
discontent  of  August  and   September,    19 16.     The  in- 
creased cost  of  living  had  now  become  oppressive,  and 
a  further  10  s.  advance  in  the  bonus  was  demanded.     If 
the  State  were  compelled  to  find  money  for  increased 
wages,  the  men  reasoned,  it  might  do  something  about 
prices.     Such  sentiments  found  expression  at  a  general- 
delegate  meeting  of  the  National  Union  at  Essex  Hall,  at 
a  demonstration  in  Hyde  Park,  at  a  mass  meeting  of 
Welshmen    at    Cardiff.     In    September    the    Welshmen 
threatened  to  stop  work  unless  an  advance  of  wages  were 
conceded  within  a  week.     The  companies  on  their  part 
offered  to  extend  the  5  s.  bonus  by  3  s.  and  to  refer  to 
arbitration  the  demand  for  a  further  advance.     The  men 
declined  the  offer.     On  September  15  the  Board  of  Trade 
intervened,   negotiating  alternately  with   the   Executive 
Committee  of  the  National  Union  and  the  General  Man- 
agers of  the  Railway  Companies.     Meanwhile  at  Cardiff 
the  men  postponed  the  strike  which  had  been  set  for  Sep- 
tember   17,   and   by   the   twentieth   an   agreement   was 
reached.     The  war  bonus  for  men  of  eighteen  and  over 
was  advanced  from  5  s.  to  10  s.,  for  men  under  eighteen 
from  2  s.  6  d.  to  5  s.^     The  Government,  of  course,  as 
administrator  of  the  railways,  assumed  responsibility  for 
the  increase.     Again,  in  April,  1917,  5  s.  was  added  to 

«A.  R.,  1916,  p.  166. 


4  WAR   TIME   CONTROL   OF   INDUSTRY 

But  the  triumph  was  not  so  much  over  unwilling  em- 
ployers as  over  an  embarrassed  government.     For  it  was 
the  Government  which  frankly  assumed  three-fourths  of 
the  £4,000,000  added  to  the  wages  bill.^     Indirectly  it 
assumed  the  entire  sum,  although  the  companies  agreed 
to  pay  25  per  cent,  of  the  increase.     This  was  in  return 
for  another  concession  from  the  Government.     The  lat- 
ter had,  it  will  be  remembered,  safeguarded  itself  in  its 
arrangement  with  the  companies  against  the  possibility 
that  earnings  during  the  first  half  of  1914  might  be  less 
than  during  the  first  half  of  1913.     This  contingency  de- 
veloped into  fact  with  the  publication  of  balance  sheets, 
the  northern  roads  having  suffered  just  before  the  war 
from  a  reaction  in  the  iron  trade  and  from  inactivity  in 
the  cotton  trade.     The  Government  would  have  been  en- 
titled to  reduce  its  payment  to  the  1914  basis,  i.  e.,  to 
have  decreased  it  by  nearly  3  per  cent.     Instead  it  stip- 
ulated that  the  companies  pay  25  per  cent,  of  the  war 
bonus  now  promised  to  the  men7     Despite  this  apparent 
shifting  of  part  of  the  burden,  the  meeting,  directly  or 
indirectly,  of  this  first  demand  of  labour  for  increased 
wages  stood  forth  in  February,  1915,  as  one  of  the  first 
fruits  of  governmental  control. 

Demands  of  the  kind  naturally  did  not  end  early  in 
191 5.  In  September  unrest  was  again  manifest  and  a 
certain  section  of  the  National  Union  of  Railvvaymen 
urged  the  termination  of  ''  the  truce.'*     Eventually,  at 

6  Jennings,  op.  cit. 

7  B.  T.  J.,  Apr.  22,  1915,  pp.  223,  224. 


/ 


THE   RAILWAYS  5 

a  meeting  between  the  executive  council  of  this  body 
and  the  representatives  of  the  companies,  the  war  bonus 
was  increased  from  3  s.  to  5  s.     More  ominous  was  the 
discontent   of  August  and   September,    19 16.     The   in- 
creased cost  of  living  had  now  become  oppressive,  and 
a  further  10  s.  advance  in  the  bonus  was  demanded.     If 
the  State  were  compelled  to  find  money  for  increased 
wages,  the  men  reasoned,  it  might  do  something  about 
prices.     Such  sentiments  found  expression  at  a  general- 
delegate  meeting  of  the  National  Union  at  Essex  Hall,  at 
a  demonstration  in  Hyde  Park,  at  a  mass  meeting  of 
Welshmen    at    Cardiff.     In    September    the    Welshmen 
threatened  to  stop  work  unless  an  advance  of  wages  were 
conceded  within  a  week.     The  companies  on  their  part 
offered  to  extend  the  5  s.  bonus  by  3  s.  and  to  refer  to 
arbitration  the  demand  for  a  further  advance.     The  men 
declined  the  offer.     On  September  15  the  Board  of  Trade 
intervened,   negotiating  alternately  with  the  Executive 
Committee  of  the  National  Union  and  the  General  Man- 
agers of  the  Railway  Companies.     Meanwhile  at  Cardiff 
the  men  postponed  the  strike  which  had  been  set  for  Sep- 
tember   17,    and   by   the   twentieth   an   agreement   w^as 
reached.     The  war  bonus  for  men  of  eighteen  and  over 
was  advanced  from  5  s.  to  10  s.,  for  men  under  eighteen 
from  2  s.  6  d.  to  5  s.^     The  Government,  of  course,  as 
administrator  of  the  railways,  assumed  responsibility  for 
the  increase.     Again,  in  April,  1917,  5  s.  was  added  to 
8  A.  R.,  1916,  p.  166. 


6  WAR    TIME    CONTROL   OF   INDUSTRY 

the  war  bonus,  which  thus  became  15  s.  a  week.^  Since 
these  liberal  awards  affected  some  350,000  men,  trade 
union  officials  could  congratulate  themselves. 

In  August,  19 1 7,  new  demands  on  the  part  of  one  of 
the   unions   went   beyond   the   simple    question   of  war 
bonuses.     During   the   summer  both   unions   had  made 
fresh  proposals  to  the  companies.     The  response  of  the 
latter  proving  satisfactory  to  the  National  Union  of  Rail- 
waymen,  a  conversion  of  the  war  bonus  into  a  war  wage 
was  accepted,  the  effect  being  an  increased  payment  for 
overtime  and  for  Sunday  duty,  which  amounted  to  some 
£13,000,000  per  annum.     A  like  offer  was  made  to  the 
Associated  Society  of  Locomotive  Engineers  and  Fire- 
men, who  represent  about  one-half  of  the  drivers  and 
firemen  and  claim  a  membership  of  35,000.     This  body, 
however,  declined  to  negotiate  regarding  a  wage  or  bonus 
unless  the  principle  of  an  eight-hour  day  was  first  con- 
ceded.    The  President  of  the  Board  of  Trade,  Sir  Albert 
Stanley,  pointed  out  that  the  Government  could  not  con- 
sider their  proposal,  since  the  question  did  not  arise  out 
of  war  conditions  nor  could  an  eight-hour  regime  pos- 
sibly be  adopted  during  the  war.     Inasmuch  as  the  pres- 
ent system  of  control,  he  added,  would  continue  for  some 
time  after  the  war,  there  would  then  be  an  opportunity  to 
deal  with  the  question  of  hours. ^^^     Mr.  Thomas,  speak- 
ing for  the  National  Union  in  the  House  of  Commons, 
declared  that  the  400,000  men  whom  it  represented  knew 

»  L.  T.,  Aug.  20,  1917,  p.  7. 

10  P.  D.  C,  Aug.  15,  1917  (L.  T,  Aug.  16,  p.  8). 


THE  RAILWAYS  7 

nothing  officially  of  the  threatened  strike  and  were  not 
concerned  in  it.^^     Elsewhere  he  explained  that  while  he 
was  in  favour  of  an  eight-hour  day  for  all  railwaymen, 
this  movement  of  the  smaller  union  aimed  at  the  securing 
of  special  privileges  for  a  single  group.     Nor  was  it  a 
genuine  eight-hour-day  movement,  since  there  was  every 
expectation  of  working  overtime  and  receiving  therefor 
additional  wages.     Above  all,  the  demand  was  in  con- 
travention of  the  truce  made  by  labour  at  the  beginning 
of  the  war  to  the  effect  that  no  pre-war  question  of  dis- 
pute should  be  brought  forward  during  the  continuance 
of  hostilities.^2 

None  the  less  the  engineers  and  firemen  persisted.  On 
Friday,  August  17,  a  meeting  of  delegates  threatened  a 
strike  unless  the  Government  within  twenty-four  hours 
conceded  their  demands.  Next  day  Sir  Albert  Stanley  and 
Mr.  George  Barnes  endeavoured  unsuccessfully  to  dis- 
suade them.  The  hour  for  the  strike  was  left  to  the  de- 
cision of  the  executive  committee,  and  at  the  conclusion 
of  the  meeting  the  younger  members  lustily  sang  "  The 
Red  Flag.''  The  Government  at  the  same  time  issued  a 
proclamation  applying  the  Munitions  of  War  Act,  which 
declared  a  strike  illegal  until  resort  had  been  had  to  the 
arbitration  of  the  Minister  of  Labour. ^^ 

Signs  of  dissent  meanwhile  appeared  within  the  union. 
At  Plymouth  a  branch  signified  that  it  would  not  obey  an 

"  Ibid. 

"  L.  T.,  Aug.  20,  1917,  pp.  7,  8. 

"  Ibid. 


8 


WAR   TIME   CONTROL   OF   INDUSTRY 


order  to  strike.  Responsible  members  declared  that  the 
extreme  Socialist  element  was  not  strong,  being  confined 
chiefly  to  South  Wales.  On  Monday  wiser  counsels  pre- 
vailed at  London.  Conferences  between  the  executive 
committee  of  the  union  and  the  Board  of  Trade  were 
resumed,  and  in  due  course  an  agreement  was  reached. 
The  strike  was  declared  off,  while  Sir  Arthur  Stanley 
renewed  and  slightly  extended  the  pledge  which  he  had 
offered  to  the  delegates  on  Saturday.  After  the  war  the 
Government  would  continue  the  control  of  railways  for  a 
time,  and  within  one  month  would  afford  an  opportunity 
for  the  bringing  forward  of  a  request  for  a  shorter  work- 
ing day.  Any  reasonable  request  would  have  the  im- 
mediate and  sympathetic  consideration  of  the  Govern- 
ment. During  the  war  the  Railway  Executive  Com- 
mittee would  reduce  hours  so  far  as  possible,  and  future 
demands  for  wages  would  be  dealt  with  as  liberally  as 
demands  in  the  past  had  been.^'*  With  this  somewhat 
generous  concession  on  the  part  of  the  Government  the 
unrest  of  the  railway  men  was  for  the  time  quieted 
and  the  machinery  of  state  control  once  more  moved 
smoothly. 

In  its  dealings  with  the  railways,  the  Government's 
prime  concern,  apart  from  the  problem  of  labour,  was 
economy  in  the  employment  of  staff  and  rolling  stock. 
Added  to  the  normal  demands  upon  the  home  railways 
was  the  enormous  task  of  transporting  troops  and  ma- 
terials of  war.     Since  these  claims  of  course  took  pre- 

1*  Ibid.,  Aug.  22,  p.  6. 


THE  RAILV^AYS  9 

cadence,  the  result  was  the  frequent  delay  of  civilian 
freight,  especially  food.  Congestion  at  the  docks  be- 
came a  persistent  evil  and  the  increased  cost  of  living 
was  at  times  and  in  part  traceable  to  the  overtaxed  trans- 
portation system. 

At  the  end  of  November,  1916,  the  Board  of  Trade, 
preparing  to  be  mandatory,  resorted  to  exhortation. 
Pointing  to  the  increased  demands  upon  the  railways, 
they  noted  that  civilian  traffic  had  diminished  little  and 
urged  that  each  prospective  traveller  ought  henceforth 
to  ask  himself  whether  his  journey  was  necessary. 
Should  matters  not  improve,  the  Government,  however 
reluctantly,  would  have  to  interfere.  Upon  traders  the 
Board  wished  to  impress  the  importance  of  avoiding  de- 
lays both  in  loading  and  unloading  wagons.  The  saving 
of  a  day  by  all  shippers  would  mean  a  substantial  ad- 
dition to  the  rolling  stock  of  the  country.  Commendable, 
too,  was  economy  in  the  use  of  sheets  for  covering 
wagons.'^ 

With  this  admonition  the  Government,  after  a  fort- 
night, proceeded  to  amend  the  Defense  of  the  Realm  Act 
by  Regulation  7  B.  This  conferred  upon  the  Board  of 
Trade  extensive  powers.  They  might  henceforth  take 
possession  of  any  private  owner's  wagons  on  making 
due  compensation;  they  might  enforce  prompt  loading 
or  unloading  of  wagons ;  they  might  curtail  statutory  re- 
quirements as  to  the  running  of  trains  and  the  stopping 
at  stations ;  they  might  restrict  or  prohibit  certain  classes 

15  B.  T.  J.,  Nov.  30,  1916,  p.  656. 


lO 


WAR    TIME    CONTROL   OF   INDUSTRY 


) 


of  traffic,  including  passengers'  luggage;  they  might 
modify  statutory  requirements  with  respect  to  maximum 
fares  foi  passengers. ^^ 

Luggage  and  fares  were  the  Board's  first  objective. 
Two  Orders  in  Council  of  December  31,  1916,  provided 
respectively  that  luggage  carried  should  not  exceed  100 
pounds  for  each  passenger  and  that  after  January  i, 
19 1 7,  the  companies  might  charge  in  addition  to  existent 
fares  a  sum  equal  to  one-half  of  such  fares.^^  The  com- 
panies, acting  promptly,  made  new  schedules  effective 
with  the  new  year.  Passenger  trains  became  fewer, 
slower,  and  longer.  Through  carriages  attached  to  main 
line  trains  were  decreased  in  number,  passengers  had  to 
change  oftener.  Through  traffic  between  districts  was, 
so  far  as  possible,  concentrated  on  one  line.  On  local 
services,  although  morning  and  evening  trains  were  not 
greatly  changed,  others  were  removed.  Reserva- 
tion of  compartments  and  seats  was  discontinued,  the 
number  of  restaurant  and  sleeping  cars  curtailed.  The 
London  and  North  Western  on  its  system  cancelled  500 
trains  and  shut  down  44  stations. ^^  Such  changes,  to- 
gether with  the  50  per  cent,  increase  in  fares,  were  ex- 
pected to  do  away  with  mere  travelling  for  pleasure. 

Hostile  criticism  was  directed  not  so  much  against  the 
imposition  of  restrictions  as  against  their  character. 
Surely  it  was  said,^^  the  first  thing  to  do  was  to  cut  off 

16  Ibid.,  Dec.  21,  igi6,  p.  865  (Order  in  Council,  Dec.  13,  1916). 

"  D.  R.  M.,  4th  ed.,  p.  360. 

18  M.  G.,  Dec.  28,  29,   1916;  L.  T.,  Jan.  i,  1917,  p.  5. 

"  E.  N.,  Jan.  6.  1917,  p.  487;  P.  D.  C,  1916,  LXXXVIII,  1818,  1846. 


) 


THE   RAILWAYS  jj 

luxuries  and  of  these  the  most  conspicuous  were  first-class 
carriages.  To  retain  them  while  raising  fares  by  50 
per  cent,  was  a  discrimination  against  wage  earners  and 
poor  people.  To  which  it  could  only  be  said  in  reply 
that  workmen's,  season,  traders',  and  zone  tickets  were 
not  subject  to  the  increase.  The  Government,  far  from 
hampenng  the  movements  of  people  like  munitions  work- 
ers, was  doing  what  it  could  to  facilitate  them. 

Two  more  orders  under  the  new  regulation,  issued  on 
March  16,  looked  toward  economy  in  the  use  of  freight 
wagons.     If  a  wagon  was  not  unloaded  by  a  trader  within 
a  specified  time  (two  days  at  inland  stations,  three  days  at 
ports,  always  excluding  the  day  of  arrival  or  receipt  of 
notice),  the  railway  company  might  cause  the  wagon  to  be 
unloaded  and  its  contents  stored  at  the  owner's  risk   all 
expenses  to  be  paid  by  the  trader.     For  loading,  one  day 
was  allowed,  although  two  days  might  be  taken  in  Scot- 
land should  the  freight  be  coal.     The  order  was  not  ap- 
plicable to  the  coal  traffic  of  England  and  Wales      If 
the  second  order  provided,   a  private  owner's  wagon 
would  otherwise  be  sent  on  a  journey  empty,  the  Board 
of  Trade  might  take  possession  of  the  wagon  for  that 
journey,    giving   such    directions    for   loading   as   they 
thought  fit  and  recompensing  the  owner  for  its  use.^o 
With  these  orders  the  policy  of  economy,  foreshadowed 
m  the  new  regulations  of  December,  was  put  into  more 
extended  operation. 

Soon   after   there   was    outlined    a    plan    for   attain- 

20  D.  R.  M.,  4th  ed.,  pp.  364,  367;  B.  T.  J.,  Mar.  29,  1917. 


12 


WAR    TIME    CONTROL   OF   INDUSTRY 


THE  RAILWAYS 


13 


t 


ing  economy  in  the  transportation  of  coal.  The  Con- 
troller of  Coal  Mines  officially  called  attention  to  the  sav- 
ing of  haulage  which  would  result  if  all  possible  descrip- 
tions of  coal  were  purchased  from  collieries  situated  as 
near  as  possible  to  the  points  where  the  coal  in  question 
was  to  be  consumed. ^^  By  July  he  had  worked  out  a 
scheme  which,  from  September  10,  1917,  would  make 
compulsory  the  saving  indicated.  For  purposes  of  trans- 
portation, Great  Britain  was  divided  into  twenty  areas 
indicated  on  widely  distributed  maps  prepared  for  the 
Controller  by  the  railway  clearing  house.  Between 
these  areas  transportation  was  to  take  place  in  accordance 
with  certain  principles.  Consumption  should  be  as  near 
the  producing  point  as  possible ;  in  consequence,  coal  pro- 
duced and  consumed  within  one  area  would  be  ignored, 
and  an  area  producing  less  coal  than  sufficed  for  its  own 
needs  should  not  send  its  product  to  other  areas.  Coal 
passing  from  one  area  to  another  should  follow  main 
trunk  lines,  since  these  had  superior  facilities,  and  should, 
as  far  as  possible,  move  in  such  well  defined  directions  as 
north  to  south,  north  to  south-east,  north  to  south-west, 
east  to  west.  In  pursuance  of  this  end  the  map  indicated 
by  straight  lines  and  arrows  the  approved  movements. 
London  and  its  environs,  for  instance,  form  one  area,  and 
converging  lines  from  midland,  northern,  or  western  dis- 
tricts show  whence  it  may  most  economically  draw  its 
supply. 

In  carrying  out  the  scheme,  factors,  merchants,  and  di- 

21  B.  T.  J.,  Mar.  15,  1917,  P-  725- 


rect  consumers  were  not  asked  to  take  any  initiative. 
District  Coal  and  Coke  Committees,  acting  for  the  Con- 
troller of  Coal  Mines,  assumed  administrative  powers. 
Every  colliery  owner,  on  receiving  instructions  from  the 
Committee  in  whose  area  his  colliery  is  situated,  was  re- 
quired to  inform  the  Committee  of  his  sales  of  coal  and 
of  the  place  or  region  supplied  by  the  purchaser.     The 
Committee  in  due  course  informed  him  what  supplies 
were  to  be  diverted  elsewhere  after  September  10,  1917, 
and  it  then  became  his  duty  to  make  this  known  to  the 
merchants  and  factors  affected.     By  these  seemingly  sim- 
pie  arrangements,  700  million  ton-miles,  it  was  estimated, 
would  be  saved  annually.22 

In  its  administration  of  the  railways  the  Government 
has  been  perhaps  more  fortunate  than  in  any  other  of  its 
essays  in  state  control.     Acting  promptly,  it  met  with  no 
opposition  from  the  owners,  and  the  terms  on  which  it 
acquired  possession  cannot  be  called  unfavourable;  the 
successive  demands  made  by  the  men  have  led  to  no  very 
serious  deadlocks,  owing  perhaps  to  the  highly  concilia- 
tory attitude  which  the  Government  in  each  instance  even- 
tually adopted;  economies  in  traffic  have  since  the  end  of 
19 16  been  secured  and  this  without  serious  inconvenience 
to  the  public.     The  record  is  undramatic  and  enviable, 
especially  when  compared  with  the  crises  and  discontent 
which  marked  the  advent  of  government  control  in  other 
industries. 

22  L.  T.,  Jy.  7,  1917,  p.  7;  U.  S.  Chamber  of  Commerce,  War  Bulle- 
tm  No.  10,  Aug.  3,  1917. 


MUNITIONS  AND  LABOUR 

During  the  first  half  of   19 15  events  abroad  and  at 
home  made  clear  to  British  statesmen  that  all  was  not 
well  either  in  the  trenches  or  in  the  workshops.     The 
battle  of  Neuve  Chapelle  disclosed  British  inferiority  in 
guns  and  shells;  a  series  of  strikes  announced  growing 
industrial  unrest.     Obviously  the  two  situations  reacted 
upon  each  other.     The  production  of  munitions  could  not 
be  increased  so  long  as  the  producers  were  indifferent  or 
rebellious;  and,  on  the  other  hand,  the  continuance  of  the 
war  tended  to  increase  the  cost  of  living,  the  burden  of 
which  fell  most  heavily  on  the  workers  and  was  passion- 
ately resented  by  them.     For  they  reasoned  that  the  in- 
crease was  unwarranted,  and  due  to  "  profiteering ''  by 
capitalists  and  middlemen.     Such  exploitation  the  Gov- 
ernment could  prevent  if  it  would;  and  prevent  it  the 
Government  must.     The  double  task  of  His  Majesty's 
ministers  in  1915,  therefore,  was  to  increase  greatly  the 
output  of  munitions  of  war  and  to  arouse  labour  by  an 
appeal  to  its  patriotism,  while  conciliating  it  by  a  limita- 
tion of  employers'  profits. 

At  the  outbreak  of  the  war  the  government  munition 
plants  for  the  army  (Woolwich  Arsenal,  Enfield,  and 
others)  were  far  from  being  in  the  state  of  readiness 
which   characterized  the  navy's   dockyards.     Nor  were 

14 


MUNITIONS   AND    LABOUR 


IS 


private  armament  firms  better  off.  Particularly  was 
there  a  shortage  of  machine  tools,  habitually  got  by  both 
England  and  France  in  large  measure  from  America. 
Although  any  one  can  make  shells,  only  skilled  workmen 
can  produce  tools.  In  the  case  of  both  the  belligerents 
and  the  United  States  there  was,  therefore,  a  period  of 
delay  before  the  equipment  for  turning  out  munitions  on 
a  large  scale  could  be  installed. 

Already  in  October,  19 14,  Great  Britain  began  to  take 
stock  of  the  military  and  industrial  situation.  The  old 
assumption  of  the  Committee  of  Imperial  Defence  that 
an  expeditionary  force  should  not  exceed  six  divisions 
had  been  discredited  and  preparations  were  on  foot  to 
send  many  times  this  number  of  soldiers  to  France.  Not 
only  were  munitions  needed  on  an  unprecedented  scale, 
but  the  character  of  them  had  to  be  changed.  High  ex- 
plosive shells  were  proving  more  important  than  shrap- 
nel. "  I  do  not  know,"  said  Mr.  Lloyd  George,  "  that 
we  have  got  to  change  the  whole  of  our  machinery,  but 
at  any  rate  it  makes  a  vast  difference  to  change  the  actual 
character  of  your  ammunition  in  the  midst  of  a  war  and 
begin  afresh."  ^  A  report  was  got  from  France  and, 
following  French  example,  the  larger  armament  firms 
introduced  a  system  of  sub-contracting.  Larger  and 
more  experienced  plants  retained  in  their  hands  the  dif- 
ficult processes  and  the  putting  together  of  parts,  exercis- 
ing likewise  supervision  over  the  less  experienced  estab- 
lishments.    Before  mid-spring  of  191 5  the  Government, 

1  P.  D.  C,  1915,  LXXI,  314. 


m 


i6 


WAR   TIME   CONTROL   OF   INDUSTRY 


either  by  direct  contract  or  by  sub-contract,  employed 
between  2500  and  3000  firms.     The  War  Office  and  a 
Cabinet  Committee  made  arrangements  by  which  men 
from  engineering  works  went  to  armament  firms  for  some 
six  weeks  while  their  own  shops  were  being  adapted ;  and 
the  knowledge  acquired  was  in  turn  valuable  in  carrying 
out  the  adaptation.     If  20  be  taken  as  representing  the 
output  of  artillery  ammunition  in  September,  19 14,  the 
output  of  succeeding  months  was :     October  90,  Novem- 
ber 90  (since  new  machines  had  not  yet  come  into  opera- 
tion), December  156,  January  186,  February  256,  March 
3S8.     By  April  the  Government  was  free  from  anxiety 
regarding  munitions  and  could  largely  supply  its  allies. 
Lord  Moulton  in  particular  had  done  much  to  increase 
the  supply  of  high  explosives.^ 

In  December,  19 14,  however,  it  had  been  discovered 
that  contractors  were  likely  to  be  late  in  fulfilling  their 
orders  owing  to  lack  of  labour.     Efforts  were  then  made 
through  labour  exchanges  to  transfer  workers  to  arma- 
ment works.     At  first  a  considerable  number  of  men 
came,  but  during  February,  191 5,  fewer,  and  by  March 
it  was  clear  that  deficiencies  could  not  thus  be  made  up.^ 
The  Government  consequently  adopted  a  "  second  best 
course."     On  March  9,   Mr.   Lloyd   George  introduced 
the  Defence  of  the   Realm  Bill,  the  cornerstone  upon 
which  was  to  be  reared  an  elaborate  structure  of  state 
control.     The  immediate  purpose  of  the  measure  was  to 

3  IVh"  ^^'  '^""^^'^'     ^P^^^^  ""^  ^''-  ^^°>^^  ^^^''^e*  Apr.  21,  1915. 


MUNITIONS  AND  LABOUR 


17 


enable  the  Government,  i.  e.  the  War  Office  and  the  Ad- 
miralty,  to  take  over  such  private  engineering  works  as 
would  insure  supplies  for  the  future.     Already  they  had 
power  to  take  over  works  in  which  war  material  was  be- 
ing produced,  but  these  were  insufficient.     No  trouble 
with  the  owners  was  anticipated  —  indeed,  the  bill  was 
expected  to  enable  owners  to  get  out  of  difficulties  when 
they  were  asked  to  throw  everything  into  the  common 
stock.     Mr.  Bonar  Law  said  that  the  Government  might 
have  had  these  powers  six  months  earlier.     The  debate 
turned  upon  the  compensation  to  be  made  and  a  com- 
mission to  consider  this  was  promised.^ 

In  March,  19 15,  however,  the  owners  of  possible  muni- 
tions plants  were  not  the  group  most  threatening  to  the 
mobilization  of  industry.     Events  were  proving  that  it 
was  quite  as  important  and  far  more  difficult  to  conciliate 
the  workers  in  munitions  and  shipbuilding  establishments. 
The  unrestricted  enlistment  of  skilled  operatives  had  to 
a  considerable  extent  impaired  productive  capacity;  and 
this  tendency  was  intensified  by  the  behaviour  of  the 
men  who  stayed  at  home.     Instead  of  working  harder 
than  in  normal  times,  many  of  them  took  advantage  of 
their  increased  earnings  to  indulge  in  idleness,  amuse- 
ment, and  drink. 

So  serious  had  the  situation  become  by  February  4, 

19 1 5,  that  the  Government  appointed  a  Committee  on 

Production.     It  was  to  report  measures   which   might 

"  ensure  that  the  productive  power  of  the  employes  in 

*  Ibid.,  LXX,  1271. 


i8 


WAR   TIME   CONTROL   OF   INDUSTRY 


engineering  and  shipbuilding  establishments  working  for 
Government  purposes  shall  be  made  fully  available." 
This  Committee,  consisting  of  Sir  George  Askwith,  Sir 
Francis  Hapgood,  and  Sir  George  Gibb,  recommended 
that  no  stoppage  of  work  by  strike  or  lockout  should  take 
place  in  such  establishments  and  that  there  should  be  set 
up  an  impartial  tribunal  to  investigate  and  settle  disputes. 
Deferring  the  compulsory  element  in  these  recommenda- 
tions, the  Government  appointed  the  Committee  itself  a 
court  of  voluntary  arbitration.^ 

Before  long  it  had  plenty  to  do.  The  number  of 
strikes  was  rapidly  increasing  with  the  progress  of  the 
new  year.  Until  then  the  efforts  of  the  three  committees 
which  controlled  trade  unions  had  had  highly  satisfactory 
results.  Of  the  lOO  strikes  in  progress  at  the  beginning 
of  the  war  only  20  were  unsettled  at  the  end  of  August, 
1 9 14,  and  the  number  had  been  reduced  to  10  by  January 
I.  In  February,  however,  industrial  unrest,  induced 
largely  by  the  increased  cost  of  food,  resulted  in  47 
fresh  disputes  which  involved  stoppage  of  work.  During 
March  there  .were  74  others,  during  April  44,  and  during 

May  63.^ 

The  first  serious  strike  of  191 5  was  that  of  the  en- 
gineers on  the  Clyde,  beginning  on  February  16.  In  some 
parts  of  Glasgow  rents  had  risen  10  per  cent.,  and  in 
general  foodstuffs  w^ere  costing  from  20  to  25  per  cent. 

5  p.  Alclen,  Labour  Unrest  and  the  War,  Contemporary  Review, 
August,  1915. 

6  P.  D.  C,  1915,  LXXII,  1572-3. 


MUNITIONS    AND   LABOUR 


19 


more  than  before  the  war.     The  men  were  feeling  the 
strain  of  the  winter's  work  and  they  saw  their  employers 
reaping  large  profits.     They  asked,  therefore,  for  an  in- 
crease in  wages  of  2  d.  the  hour.     When  the  companies 
offered  only  %  d.,  some  10,000  men  resolved  to  strike. 
In  this  they  disregarded  the  advice  of  their  trade  union 
executive,    following  instead  obscure  leaders  of  Syndi- 
calist tendencies.     The  Government  intimated  that  w^ork 
must  be  resumed,  promising  that  representatives  of  the 
men  should  meet   the  newly  appointed   Committee  on 
Production  and  arrange   for  arbitration.     The  meeting 
was  set  for  March  8,  the  strike  committee  meanwhile 
on  March  4  recommending  a  return  to  work,  which  forth- 
with took  place.     But  the  men  declared  that  if  they  did 
not   eventually   receive   the   2d.    demanded   they  would 
adopt  the  policy  of  "  ca'  canny,"  i.  e.  remain  at  work  but 
do  as  little  as  possible.     The  arbitration  of  the  Commit- 
tee on  Production  was  duly  accepted.     Its  award,  how- 
ever, made  known  on  March  24,  disappointed  the  men, 
since  an  advance  of  only  i  d.  an  hour  (or  10  per  cent,  on 
piece  work)   was  granted.     Thereupon  they  kept  their 
word,  although  the  fact  was  not  generally  known.^ 

The  Committee  meanwhile  made  three  reports.  Time 
available  for  production  was  being  lost  through  absen- 
teeism, through  stoppages  by  strikes  and  lockouts, 
through  "demarcation"  disputes  between  unions  about 
the  allocation  of  work,  and  through  trade  union  restric- 

7  A.  R.,  1915,  p.  86;  Alden,  op.  cit. ;  A.  Shadwell,  The  Industrial 
Factor  in  the  War,  Nineteenth  Century  and  After,  Aug.,  1915. 


20 


WAR    TIME    CONTROL   OF    INDUSTRY 


MUNITIONS   AND   LABOUR 


21 


tions,  which  among  other  things  prevented  the  employ- 
ment of  semi-skilled,  unskilled,  and  female  labour.  The 
suspension  of  these  restrictions  was  recommended. 

To  meet  the  situation,  representatives  of  thirty-five 
trade  unions  were  summoned  to  an  interview  on  March 
17  with  the  Chancellor  of  the  Exchequer  and  the  Presi- 
dent of  the  Board  of  Trade, -the  so-called  Treasury  Con- 
ference. Mr.  Lloyd  George,  after  demonstrating  the 
need  of  munitions,  announced  that  the  Government  in- 
tended to  limit  the  profits  of  emplpyers.  To  the  unions 
he  proposed  that  during  the  war  all  restrictions  on  output 
should  be  suspended  and  that  no  strikes  should  take  place 
on  Government  work,  any  dispute  to  be  settled  by  an 
impartial  tribunal  nominated  by  the  Government.  At  the 
conclusion  of  the  conference  on  March  20  these  proposals 
were  embodied  in  a  memorandum  which  the  representa- 
tives of  the  unions  agreed  to  recommend  to  their  fellow 
members.  Trade  union  practices  should  be  relaxed,  but 
neither  this  nor  the  admission  of  semi-skilled  or  female 
labour  should  affect  adversely  the  rates  customarily  paid 
for  work.  Disputes  over  wages  or  conditions  were 
henceforth  to  be  discussed  in  a  conference  between  em- 
ployers and  employed;  if  agreement  should  prove  unat- 
tainable, the  matter  should  be  submitted  to  the  Committee 
on  Production,  or  to  a  single  arbitrator  agreed  upon  by 
both  parties  or  appointed  by  the  Board,  or,  finally,  to  a 
Court  of  Arbitration  upon  which  employers  and  men 
should  be  equally  represented.^ 

8  P.  D.  C,  1915,  LXXII,  1573;  L.  T.,  Mar.  20,  1915,  p.  11. 


This  memorandum  did  not  have  the  wide  acceptance 
hoped  for,  although  it  was  by  no  means  disregarded.  In 
April  there  were  fewer  strikes,  and  a  number  of  impor- 
tant disputes  were  referred  to  the  Committee  on  Produc- 
tion. This  body,  transformed  into  a  court  of  arbitration, 
showed  a  tendency  to  compromise  by  fixing  wages  at  a 
figure  half  way  between  the  demands  of  the  men  and  the 
offer  of  the  employers.  For  the  rest,  trade  union  prac- 
tices were  relaxed  only  in  certain  trades  and  localities  — 
not  elsewhere.  The  men  were  disinclined  to  follow  the 
lead  of  their  official  representatives,  nor  was  there  any 
compulsion  which  could  be  brought  to  bear  upon  them. 
If  employers  discharged  them,  other  jobs  were  waiting 
on  every  hand.  In  some  districts  the  situation  became 
worse  than  before.^ 

Scarcely  had  the  memorandum  been  published  when  a 
strike  of  dock  labourers  at  Liverpool  and  Birkenhead 
caused  the  Government  serious  concern  and  was  ended 
only  by  a  semi-military  device.  The  dispute  had  to  do 
with  over-work  at  week-ends  and  payment  for  it.  Despite 
an  admonitory  letter  on  March  21  from  Lord  Kitchener 
and  a  patriotic  appeal  on  March  30  from  Mr.  James  Sex- 
ton, one  of  their  leaders,  the  men  were  obdurate.  To 
carry  out  government  work  at  the  port,  a  Dockers'  Battal- 
ion was  formed  during  the  first  week  in  April  under  the 
command  of  Lord  Derby.  These  civilian  soldiers,  liable 
to  home  service  only,  were  subject  to  military  law  and  re- 
ceived both  civil  and  military  pay  with  a  guarantee  to 

»P.  D.  C,  1915,  LXII,  1573-79;  L.  T.,  Je.  i,  1915,  p.  5. 


22 


WAR    TIME    CONTROL    OF    INDUSTRY 


each  man  of  a  minimum  wage  of  42  s.  a  week.  Mem- 
bership was  Hmited  to  the  Dockers'  Union,  and  trade 
union  rules  prevailed.  On  April  12  the  battalion  was 
inaugurated,  Lord  Derby  reviewing  the  350  men  who 
had  enrolled.  At  the  same  time  the  brief  strike  of 
dockers  at  Birkenhead  came  to  an  end.^^ 

During  April  and  May  the  Government  gave  much  at- 
tention to  the  drink  question.     On  March  29  a  deputation 
from  leading  ship-building  firms,  received  by  the  Chan- 
cellor of  the  Exchequer  and  the  Secretary  for  Scotland, 
declared  with  conviction  born  of  long  experience  that  80 
per  cent,  of  the  current  avoidable  loss  of  time  was  due  to 
drmk.     Mr.  Lloyd  George  summarily  described  the  sit- 
uation :     "  We  are  fighting  Germany,  Austria  and  Drink ; 
and  so  far  as  I  can  see  the  greatest  of  these  deadly  foes 
IS  Drink."     The  effect  of  example  was  tried.     On  April 
6  it  was  announced  that  by  the  King's  command  no  wines, 
spirits,  or  beer  would  henceforth  be  consumed  in  any  of 
His  Majesty's  households.     Lord  Kitchener  made  a  like 
renunciation.     The  Government,  making  inquiries,  found 
that  the  mischief-making  liquors  were  spirits  and  the  in- 
ferior but  more  potent  kinds  of  beer.     After  Easter  pro- 
posals of  a  highly  restrictive  nature  were  brought  before 
the  House  of  Commons.     Taxes  on  liquors  were  to  be 
much  increased,  a  greater  dilution  permitted,  and  public 
houses  in  certain  areas  were  to  be  closed.     Opposition 
arose  particularly   from   the  Nationalists,  who  deplored 
the  injury  which  would  be  done  to  a  great  Irish  industry 
i^A.  R,  1915,  pp.  88,  91. 


MUNITIONS   AND   LABOUR 


23 


and  threatened  to  use  all  constitutional  means  to  defeat 
the  bill.  Learning  of  this  Mr.  Lloyd  George  met  a  depu- 
tation of  ''  the  trade  "  to  arrange  a  compromise.  The 
taxes  were  withdrawn  and  it  was  agreed  that  the  sale  of 
spirits  less  than  three  years  old  should  be  prohibited  and 
that  existent  stores  should  be  put  in  bond.  With  this 
somewhat  slight  result,  the  agitation  died  down  and  the 
subject  dropped  from  discussion. ^^ 

The  proposed  bill  had  been,  of  course,  symptomatic  of 
the  concern  with  which  the  Government  regarded  the 
military  and  industrial  situation.  By  the  middle  of  May 
it  was  clear  that  the  measures  taken  in  March  had  not 
been  adequate.  Especially  was  labour  still  unconciliated, 
feeling  that  employers'  profits  had  not  yet  been  restricted. 
A  political  and  administrative  change  now  marked  the 
initiation  of  a  new  endeavour  to  increase  productivity. 
On  May  19  it  was  announced  that  a  Coalition  Govern- 
ment would  be  formed  and,  when  the  House  met  on  June 
3,  the  composition  of  it  was  complete.  Twelve  Liberals, 
eight  Unionists,  one  Labour  member,  and  Lord  Kitchener 
assumed  the  administration  affairs. ^^ 

That  arm  of  the  new  Government  which  was  to  grapple 
with  the  industrial  situation  was,  like  the  Coalition,  an 
innovation.  Mr.  Lloyd  George  was  to  become  Minister 
of  Munitions,  and  a  bill  passed  by  Parliament  to  estab- 
lish the  ministry  received  royal  assent  on  June  9.  Dur- 
ing the  discussion  in  the  upper  house,  Lord  Stanhope, 

11  Ibid.,  pp.  90,  97,  98,  103. 

12  P.  D.  C,  1915,  LXXI,  2392. 


24 


WAR   TIME    CONTROL   OF    INDUSTRY 


about  to  return  to  the  front  next  day,  described  the  sit- 
uation. "  I  am  stating  nothing  that  every  German  staff 
officer  does  not  know  when  I  say  that,  speaking  broadly, 
the  French  hold  their  trenches  by  a  few  rifles  and  the 
support  of  their  wonderful  75  mm.  guns;  while  we  hold 
our  trenches,  broadly,  by  rifle  fire.  The  French  system 
is  expensive  in  ammunition;  ours  is  expensive  in  life." 
He  added  that  a  man  who  refused  to  do  his  duty  in  the 

workshop  should  be  sent  to  fight  whether  he  liked  it  or 
not.i3 

This  application  of  compulsory  measures  to  labour 
came  up  for  debate  in  the  House  and  was  subject  to  sharp 
criticism.  It  was  said  that  the  new  Minister  was  being 
given  power  to  tyrannize  over  the  working  classes,  to 
conscript  labour,  to  impose  slavery  on  the  country.  Sir 
John  Simon,  in  charge  of  the  Bill,  replied  that,  if  special 
powers  were  needed  in  respect  to  labour,  they  would  be 
asked  for  from  the  House.  Next  day  an  amendment 
was  accepted,  declaring  that  the  Minister  of  Munitions 
would  have  no  power  to  impose  penalties  upon  workmen 
for  doing  what  they  had  hitherto  been  entided  to  do.^* 

Mr.  Lloyd  George  entered  upon  the  duties  of  his  new 
office  with  great  energy.  On  June  10  he  received  repre- 
sentatives of  twenty-two  trade  union  organizations.  On 
June  II  and  12  he  made  important  speeches  at  Cardiff 
and  Bristol.  By  June  2^  he  was  introducing  in  the 
House  a  great  legislative  measure  to  mobilize  industry, 

13  p.  D.  L,  1915,  XIX,  36. 

i*P.  D.  C,  1915,  LXXII,  107-115.  210. 


MUNITIONS   AND   LABOUR 


25 


and  by  July  3  this  bill  had  become  law.  His  exposition 
of  the  situation  and  his  plans  for  improving  it  were  as 
follows. 

The  Central  Powers  were  turning  out  shells  at  the  rate 
of  250,000  per  day.     The  pouring  of  200,000  shells  with- 
in an  hour  upon  Przemysl  had  driven  the  Russians  out 
of  that  fortress.     Germany's  victories  thus  far  were  due 
to  the  organization  of  her  workshops,  and  ultimate  vic- 
tory or  defeat  would  depend  upon  the  supply  of  muni- 
tions.    In  the  production  of  munitions  France  was  crip- 
pled, since  70  per  cent,  of  her  steel  plants  were  in  the 
hands  of  the  enemy.     Not  only  had  Germany  accumu- 
lated great  stores  beforehand,  but  she  had  mobilized  all 
her  industries  since  the  war.     Most  marked  was  her  supe- 
riority in  heavy  guns,  in  high  explosives,  in  rifles,  above 
all  in  machine  guns.     The  last  had  proved  to  be  about  the 
most  formidable  weapon  of  the  war,  almost  superseding 
the  rifle.     But,  alas,  to  construct  machinery  for  making 
them  required  eight  or  nine  months.     The  history  of  ten 
months  of  trench  warfare,  which  the  Germans  had  cor- 
recdy  anticipated,  was  the  defence  of  one's  own  trenches 
with  machine  guns  while  battering  one's  enemies'  trenches 
with  heavy  guns  and  high  explosives. 

To  meet  the  twenty-five  fold  expansion  in  its  activi- 
ties,^^ Mr.  Lloyd  George  continued,  the  War  Office  first 
resorted  to  the  existing  armament  firms  and  had  them  is- 
sue sub-contracts.    The  method,  however,  had  not  resulted 

15  The  expenditure  of  the  War  Office  in  time  of  peace  has  been 
£28  million  but  within  ten  months  had  increased  to  £700  million. 


26 


WAR   TIME   CONTROL  OF   INDUSTRY 


in  the  greatest  possible  productivity,  since  the  firms  had 
not  been  able  to  control  the  subsidiary  staffs.  A  district 
which  he  had  recently  visited  produced  under  sub-con- 
tracting some  10,000  shells  a  month,  but  under  his  new 
arrangements  at  once  accepted  orders  for  150,000  shells 
a  month  and  would  in  time  double  even  this  output. 
Areas  seemingly  unpromising  could  do  much.  Showing 
to  the  House  a  fuse  for  the  highest  explosive,  requiring 
in  its  making  100  gauges,  the  Minister  of  Munitions  de- 
clared that  London  could  make  such  delicate  parts. 

The  first  requisite  was  to  find  the  organizer,  the  man 
who  could  make  best  use  of  the  expert.  Many  business 
men  of  this  type  the  Ministry  had  secured,  men  who 
would  be  asked  to  organize  the  Central  Office  and  the  re- 
sources of  various  localities,  while,  as  a  Central  Advisory 
Committee,  they  would  assist  in  dealings  with  other  busi- 
ness men.  To  each  of  these  men  would  be  given  his 
special  field  —  to  one  metals,  to  another  machinery,  to 
another  explosives,  to  another  labour,  and  the  like.  The 
country  had  been  divided  into  ten  munitions  areas,  each 
under  local  business  men  formed  into  committees  of  man- 
agement. In  the  centre  of  each  area  representatives  of 
the  Ministry  of  Munitions  would  have  headquarters 
where  specifications,  samples,  etc.,  would  be  available. 
Although  every  opportunity  had  already  been  given  to 
British  engineers  to  go  through  government  arsenals  or 
through  arsenals  of  the  Elswick  Co.,  of  Vickers  and 
Maxims,  of  Beardmores  and  the  rest,  the  same  facilities 
ought  to  be  available  in  every  district,  where  advantage 


MUNITIONS    AND   LABOUR 


27 


might  be  taken  of  them  without  loss  of  time.  Associated 
with  every  local  Committee  would  be  an  expert  engineer 
and  representatives  of  the  Admiralty  and  the  War  Of- 
fice.^^ 

In  his  Cardiff  speech  Mr.  Lloyd  George  outlined  the 
three  possible  methods  of  utilizing  private  engineering 
plants.     In  any  area,  from  one  to  three  existing  works 
might  be  converted  into  national   factories  directed  to- 
ward nothing  but  the  production  of  shot  and  shell.     Since 
new  machinery  was  difficult  to  get,  machinery  from  the 
various  shops  throughout  the  district  would  have  to  be 
requisitioned  to  fit  out  these  new  arsenals.     Leeds  and 
two  or  three  other  centres  in  Yorkshire  had  proceeded 
thus.     Lancashire     preferred     a     more     individualistic 
method,  the  one  adopted  in  France  with  great  success. 
Each  workshop  there  estimated  its  own  capabilities  and 
added  such  machinery,  especially  gauges,  as  would  en- 
able It  to  turn  out  some  type  of  munitions.     A  third 
methcfd  combined  the  other  two.     Two  or  three  works 
might  be  converted  into  a  kind  of  national  arsenal,  which 
would  then  serve  as  finishing  plant  while  the  others  did 
preparatory  work.     This  was  feasible  in  South  Wales 
War  ^Munitions  Committees,  like  the  one  first  constituted 
at   Newcastle-upon-Tyne,   should   decide   which   method 
was  preferable  for  each  district.     To  engineering  firms 
that  offered  to  convert  their  works,  but  objected  to  trade 
rivals  getting  their  business,  assurance  was  given  that 
there  should  be  equality  of  sacrifice.^^ 

i«P.  D.  C,  1915,  LXXII.  1 183-1206. 
17  L.  T.,  Je.  12,  1915,  p.  8. 


28 


WAR    TIME    CONTROL   OF    INDUSTRY 


Although  materials  of  certain  sorts  were  abundant 
enough,  others  had  to  be  husbanded.  The  latter  must 
not  be  wasted  on  non-essential  work  or  the  Government 
might  be  ultimately  compelled  to  take  control  of  the 
market.  That  the  Ministry  might  be  regularly  and  ac- 
curately informed  about  the  stocks  of  raw  or  semi-manu- 
factured metal  in  the  country,  it  would  ask  for  monthly 
returns.  There  were  unfortunately  indications  that  in 
certain  quarters  supplies  were  being  held  for  higher 
prices.  Such  action  caused  serious  delay  and  must  be 
stopped.  ^^ 

From  the  question  of  enlisting  private  engineering 
firms  in  the  business  of  munitions  making,  Mr.  Lloyd 
George  turned  to  the  problem  of  labour.  For  this  had 
led  him  to  introduce  the  new  bill.  Were  he  able  to  fur- 
nish skilled  workmen,  the  supply  of  machine  guns  could 
be  doubled  in  a  few  days.  A  Midland  firm  could  greatly 
have  increased  its  output  had  it  only  been  able  to  set  up 
idle  machinery;  but  it  could  not  find  seventy  five  mill- 
wrights to  perform  this  task.  One  remedy  was  to  get 
such  engineers  as  could  be  had  back  from  the  front.  The 
ministry  had  issued  a  circular  to  engineering  firms  asking 
for  the  names  of  men  who  had  left  them  for  the  war. 
Lord  Kitchener  had  instructed  his  Adjutant  General  to 
invite  such  men  to  return  to  works  turning  out  munitions 
of  war.  Some^men  were  unwilling  to  come  back  and 
some  had  unfortunately  been  sent  to  India,  but  the  War 
Office  would  do  what  it  could. ^® 

18  p.  D.  C,  1915,  loc.  cit. 
"  Ibid. 


MUNITIONS   AND    LABOUR 


29 


As  to  men  who  were  still  at  home,  difficulties  arose 
from  their  readily  leaving  one  job  for  another.     Em- 
ployers were  ready  to  outbid  one  another  or  to  accept 
discharged    employes;    but   without    control    over   their 
workmen,  they  found  that  they  could  not  prevent  slack- 
ness or  attain  a  maximum  output.     What  would  be  most 
valuable,  however,  was  an  increased  supply  of  labour  and 
to  this  end  trade  union  regulations  should  be  relaxed. 
Although  in  France  there  were  great  trade  unions  and 
the  organizer  of  the  munitions  supply  was  a  young  So- 
cialist, the  employment  of  women  and  unskilled  labour- 
ers had  already  been  permitted.     Fuse  making  was  done 
there  by  female,  labour.     At  home  a  Bristol  firm  had  re- 
ported that,  if  it  could  eke  out  skilled  labour  by  unskilled, 
it  could  put  a  night  shift  on  its  machinery  and  double 
its  output.     If  union  rules  should  be  suspended,  the  na- 
tion, on  its  part,  must  give  a  pledge  that  the  suspension 
would  be  temporary  and  that  the  safeguards  which  the 
unions  had  with  such  difficulty  acquired  would  be  re- 
stored. 

Lastly,  there  ought  to  be  no  strikes.  Mr.  Lloyd  George 
admitted  that  he  would  like  to  see  compulsory  arbitra- 
tion of  disputes  during  the  war  and  still  hoped  to  get 
it.  As  things  stood,  although  the  cotton  operatives  and 
the  miners  stood  out,  the  men  who  turn  out  munitions 
and  ships  had  assented  to  such  a  measure.  This  had 
been  the  outcome  of  the  March  conference  with  the 
thirty-five  trade  unions  and  of  other  conferences  held 
since  then.^^ 

20  Ibid. 


30 


WAR    TIME    CONTROL   OF    INDUSTRY 


Thus  prepared  for  and  introduced,  the  Munitions  of 
War  Act,  191 5,  met  with  Httle  opposition  in  ParHament. 
Carrying  to  fulfilment  the  principle  embodied  in  the  De- 
fense of  the  Realm  Act,  the  principle  that  the  Govern- 
ment may  assume  control  of  any  private  works  which 
it  needs  for  the  manufacture  of  munitions,  the  new  Act 
was  perhaps  the  most  decisive  step  in  state  control  of 
industry  taken  during  the  war.     The  Minister  of  Muni- 
tions, it  provides,  may  declare  "  controlled  "  any  estab- 
lishment in  which  munitions  work  is  carried  on.     Such 
declaration,  as  affecting  the  owner,  limits  the  profit  which 
he  may  enjoy.     His  net  profit  may  exceed  the  standard 
unit  by  only  one-fifth,  and  the  standard  unit  is  the  aver- 
age amount  of  his  net  profit  during  the  two  correspond- 
ing periods  before  the  outbreak  of  the  war.     After  the 
war,  priority  in  employment  in  any  establishment  will  be 
given  to  workmen  who  have  been  with  the  Colours  and 
to  those  employed  when  the  establishment  became  con- 
trolled.    No  change  in  rules  or  customs  made  during  the 
war  shall  prejudice  the  position  of  the  trade  unions  in 
regard  to  the  resumption  of  such  rules  and  customs  after 
the  war.     Notice  of  any  change  in  working  conditions 
shall  be  given  to  the  workmen,  who,  in  turn,  may  request 
an  opportunity  for  local  consultation.     The  introduction 
of  semi-skilled  and   female  labour  shall  not  affect  the 
wages  paid  for  any  kind  of  work,  and  the  workers  so 
introduced  shall  receive  the  wages  customary  in  the  dis- 
trict for  the  class  of  work  in  question.     Record  of  all 
changes  shall  be  kept  and  shall  be  open  to  inspection  by 


MUNITIONS    AND    LABOUR 


31 


the  Government.     Sucti    were   the   regulations   imposed 
upon  the  employer. 

Regarding  the  workmen,  the  Act  embodies  provisions 
tending  to  apply  the  restrictions  suggested  by  Mr.  Lloyd 
George  in  his  speeches.     Any  person  whose  last  employ- 
ment has  been  on  munitions  shall  not  be  engaged  by  an 
employer  unless  he  holds  a  "  leaving  certificate  "  from  his 
last  employer  or  from  a  munitions  tribunal.     This  was 
to  remedy  the  "pilfering"  of  workmen.     No  lockout 
further,  shall  be  declared  by  an  employer  and  no  em- 
ploye shall  take  part  in  a  strike.     Instead,  any  difference 
shall  be  referred  for  arbitration  to  any  one  of  the  three 
tribunals  recognized  in  the  March  agreement,  viz.,  the 
Committee  on  Production,  a  single  arbitrator  agreed  upon 
by  the  parties  or  appointed  by  the  Board,  or,  in  the  third 
place,  a  Court  of  Arbitration,  composed  equally  of  repre- 
sentatives of  employers  and  of  employes,  its  chairman 
appomted  by  the  Board  of  Trade.     The  choice  of  tribunal 
shall  lie  with  the  parties  or,  in  default  of  agreement 
w,th  the  Board  of  Trade.^'     To  conciliate  the  miners 
and  the  cotton  operatives,  who  objected  to  this  provision 
for  compulsory  arbitration  in  the  bill,  an  amendment  was 
accepted,  providing  that,  if  the  Minister  of  Munitions  was 
satisfied  that  means  existed  in  any  industry  for  settling 
a  dispute  affecting  work  other  than  work  on  munitions, 
no  proclamation  should  be  made  in  reference  to  the  dis- 
pute. 

No.' ^09^'  •''•  ^-  '^'^'  "■  '"=  ^-  ^-  ^-  ^°'-  "'■■'  P"'-  P^P".  '915, 


32 


WAR   TIME   CONTROL   OF    INDUSTRY 


While  the  bill  was  debated  in  Parliament  and  while  it 
seemed  that  the  inadequate  supply  of  labour  might  lead 
to  the  institution  of  some  form  of  compulsion  other  than 
the  bill  provided  for,  the  trade  unions  asked  for  seven 
days  in  which  to  act.  They  proposed  to  secure  by  vol- 
untary enlistment  a  mobile  corps  of  munitions  workers. 
With  each  volunteer  the  Government  was  to  enter  into  a 
contract  providing  that  he  be  employed  where  needed  and 
as  needed  and  stipulating  that  there  be  no  bad  time  or 
other  slackness.  Cases  of  violation  should  come  before 
a  Munitions  Court  consisting  of  an  employer,  a  trade 
union  representative,  and  a  president  appointed  by  the 
Government.  If  the  volunteer  could  satisfy  the  enrolling 
bureau  that  he  was  a  skilled  engineer  (for  engineers 
were  the  class  to  be  reached),  he  was  to  receive  a  pocket 
certificate  which  stated  over  the  signature  of  the  Minister 
of  Munitions  that  he  was  *'  enrolled  as  a  War  Munitions 
Volunteer  in  the  service  of  King  and  country."  ^^ 

The  Government  readily  put  its  machinery  at  the  serv- 
ice of  the  unions  in  this  matter,  and  i8o  town  halls  were 
turned  into  recruiting  offices.  During  the  first  week  46,' 
000  men  were  enrolled  and  eventually  the  number  was 
raised  to  almost  100,000.  In  as  much,  however,  as  about 
four-fifths  of  the  volunteers  were  already  engaged  on 
Government  work,  the  recruits  actually  available  for  the 
new  munitions  program  were  scarcely  adequate. ^^  It 
would  clearly  be  necessary  to  rely  upon  the  dilution  of 

22  L.  T.,  Je.  24,  1915,  p.  10;  Je.  25,  p.  9. 

23  Ibid.,  Jy.  3.    A.  R.,  1915,  p.  147- 


MUNITIONS   AND   LABOUR 


33 


labour  promised  by  the  leaders  of  the  thirty-five  unions 
at  the  Treasury  Conference  in  March. 

In  two  speeches,  one  made  before  the  Trade  Union 
Congress  at  Bristol,  and  one  delivered  in  Parliament, 
Mr.  Lloyd  George  summarized  the  situation  at  the  end 
of  the  summer  of  191 5.-*     Sixteen  national  factories  or 
arsenals  had  been  set  up  and,  as  the  result  of  a  conference 
with  French  military  authorities,   eleven  more  were  to 
be.     To  secure  the  supply  of  machine  tools  required,  es- 
pecially for  shells  of  heavy  calibre,  all  the  great  machine- 
tool  makers  had  agreed  to  come  under  government  con- 
trol.    For  the  new  arsenals  80,000  more  skilled  men  and 
200,000  more  unskilled  were  needed.     The  country  was 
not  yet  doing  its  utmost.     Only  15  per  cent,  of  the  ma- 
chines  for  turning  out  rifles,   cannon,  and  shells  were 
working  at  night.     Trade  union  practices  were  reducing 
the  output  of  munitions  by  25  per  cent.     Although  the 
Government  had  kept  its  promise  to  appropriate  war 
profits,  the  unions  had  not  carried  out  their  part  of  the 
Treasury   Conference   bargain.     In   many  arsenals   and 
shops  semi-skilled  men  were  prevented  from  doing  work 
hitherto  done  by  skilled,  the  engagement  of  women  was 
vetoed,  and  hard  work  was  discouraged. 

Although  Mr.  Lloyd  George's  charges  at  Bristol  pro- 
duced a  great  effect  upon  the  Congress,  he  found  it  nec- 
essary to  repeat  many  of  them  in  the  Commons  just  be- 
fore the  Christmas  adjournment  of   191 5.     There  and 

2*  On  Sept.  9  and  on  Dec.  20.    L.  T.,  Sept.  10,  1915,  pp.  9,  10; 
P.  D.  C,  1915,  LXXVII,  95-122. 


34 


WAR    TIME    CONTROL   OF    INDUSTRY 


11 


again  at  Glasgow,  where  on  Christmas  morning  he  ad- 
dressed some  3,000  shop  stewards  and  trade  union 
officials,  he  dwelt  upon  the  "  imperative  need  of  some 
scheme  of  labour  dilution."  Women  and  unskilled  men 
ought  to  be  employed  upon  many  tasks  which  still  ab- 
sorbed skilled  labour.^^  The  same  note  was  struck 
throughout  the  first  half  of  19 16.  In  March  the  Board 
of  Trade  appointed  a  Committee  to  devise  measures  to 
extend  the  employment  of  women  in  industrial  occupa- 
tions and  to  report  from  time  to  time  on  progress  made 
in  various  localities  and  industries.^^  In  June  it  called 
the  attention  of  employers  to  the  possibilities  of  using 
women's  labour  in  factories  and  works.^"^  By  August, 
Mr.  Montague,  the  new  Minister  of  Munitions,  could  re- 
port that  the  number  of  women  employed  in  munitions 
works  was  about  400,000,  or  nearly  double  the  number 
employed  a  year  before.  In  19 14- 15  the  percentage, 
relative  to  all  such  workers,  had  risen  from  9  per  cent,  to 
II  per  cent.,  during  the  next  year  to  17  per  cent.^^  Five 
hundred  munition-making  processes  w^ere  performed  by 

25  L.  T.„Dec.  27,  1915,  p.  3. 

26  B.  T.  J.,  Mar.  9,  1916,  p.  697. 

27  Ibid.,  Je.  15,  1916,  p.  732. 

28  In  August,  1917,  it  was  officially  stated  that,  to  the  3,298,000 
women  employed  in  the  country  before  the  war,  1,240,000  had  been 
added  and  that  the  women  who  had  directly  replaced  men  were 
1,256,000.  Of  the  latter,  438,000  were  employed  in  industry,  308,000 
in  commerce,  187,000  in  government  establishments,  32,000  in  agri- 
culture (L.  T.,  Aug.  17,  1917.  P-  3)-  In  November,  1917,  Sir 
Stephenson  Kent  stated  that  nearly  one  million  women  were  en- 
gaged in  munitions  work.     (N.  Y.  Times,  Nov.  10,  1917.) 


MUNITIONS   AND    LABOUR 


35 


women,  upon  two-thirds  of  which  no  women  had  been 
engaged  twelve  months  before. 

Considering  the  whole  situation  regarding  munitions, 
Mr.  Montague  pointed  out  that  the  three  national  fac- 
tories of  July,  1914,  had  increased  to  95,  that  the  establish- 
ments "  controlled  "  were  about  4,000,2^  that  the  number 
of  persons  employed  in  them  had  increased  between  June, 
1915,  and  June,  1916,  from  1,635,000  to  2,250,000.  Ef- 
forts to  bring  back  skilled  workmen  from  the  army  had 
restored  45,000;  the  volunteer  scheme  had  yielded  13,500 
others  who  had  actually  been  transferred  to  war  work. 
Men  of  this  sort  spent  most  of  their  time  in  setting  up 
machines  and  in  supervising  the  work  of  the  unskilled, 
fifteen  or  twenty  of  the  latter  often  being  assigned  to 
one  skilled  worker.  To  educate  the  unskilled,  schools 
had  been  set  up.  Over  500  people  had  been  trained  as 
tool-setters  to  work  on  a  special  type  of  machine ;  nearly 
200  plumbers  had  been  transformed  into  skilled  lead- 
burners,  130  jewelers  into  gauge-makers.^^  Such  were 
the  methods  and  results  of  diluting  labour. 

The  achievements  of  Mr.  Lloyd  George's  new  depart- 
ment during  the  first  twelve  months  of  its  existence  were 
impressive.  Nearly  three  times  as  many  rifles,  more  dif- 
ficult to  produce  than  any  other  munition  of  war,  were 
accepted  as  during  the  preceding  ten  months ;  many  hun- 
dred thousand  others  were  resighted  and  repaired. 
Nearly  twice  as  many  guns  for  land  service  were  turned 

2»  Early   in   June,    1917,   the   number   was   officially   stated   to   be 
4942.    M.  G.,  Je.  7,  1917- 
30  P.  D.  C,  1916,  LXXXV,  1699,  1694. 


36 


WAR    TIME    CONTROL   OF    INDUSTRY 


out  in  a  month  at  the  end  of  the  twelve-months  as  at  the 
beginning  of  it.  The  weekly  output  of  machine  guns 
had  increased  fourteenfold.  In  the  case  of  ammuni- 
tion the  rate  of  increase  was  6^/^  for  i8-pounder,  8j4 
for  field  howitzer,  7J/2  for  medium  artillery,  while  for 
heavy  shells,  the  most  difficult  to  produce,  it  was  22.  Of 
high  explosives,  the  output  in  June,  19 16,  was  66  times  as 
great  as  at  the  beginning  of  191 5,  of  bombs  33  times  as 
great  as  in  May  of  that  year.^^ 

The  expenditure  of  the  Ministry  in  the  summer  of 
19 1 6  was  over  £1,000,000  a  day.  To  expend  this  ad- 
vantageously it  had  seldom  been  obliged  to  use  its  ex- 
tensive powers  to  examine  into  the  costs  of  manufactur- 
ers, but  it  had  made  alterations  in  costs  with  their  concur- 
rence. The  key  to  the  problem  of  financial  control  was 
provided  by  the  cost  accounting  system  introduced  into 
the  Government's  own  factories.  From  the  knowledge 
so  gained,  the  Ministry  had  been  able  to  discern  the  ex- 
travagance or  faulty  administration  in  other  factories  and 
to  check  contract  prices.  The  mere  threat  to  examine 
the  books  of  one  firm  had  brought  the  price  of  a  certain 
material  from  £30  a  ton  to  £20,  thus  saving  the  country 
one-half  a  million  sterling  in  a  short  time.  Costs  in  the 
Government's  own  factories,  high  at  the  beginning,  fell 
rapidly  until  they  had  become  much  less  than  the  19 15 
contract  prices.  The  ensuing  reduction  in  home  con- 
tracts represented  in  the  case  of  shells  a  saving  of  £20,- 
000,000  a  year.     American  shell  contract  prices  had  been 

«Ubid.  1679-1682. 


V 


MUNITIONS   AND   LABOUR 


37 


1/ 


) 


I 


I 


reduced  15  per  cent.,  Canadian  i2>^  per  cent.,  while 
trench-warfare  munitions  had  fallen  40-50  per  cent. 
The  cost  of  the  large  factories  erected  or  being  erected 
for  explosives  and  propellants  would,  Mr.  Montague  pre- 
dicted, be  completely  covered  in  less  than  a  year  by  the 
difference  between  the  cost  of  their  output  and  the  price 
of  similar  munitions  if  imported.^^ 

The  method  of  determining  the  margin  of  profit  al- 
lowed a  controlled   establishment  was   outlined   in   the 
"  Munitions  (Limitation  of  Profits)  Rules  "  of  Septem- 
ber 15,  1915.     The  "standard  amount  of  profits"  was 
defined  as  the  average  of  the  amount  of  net  profits  for 
the  standard  period ;  and  the  standard  period  was  the  two 
financial  years  before  August  4,  1914.     Auditing  must 
be  done  by  a  chartered  or  incorporated  accountant  or  by 
an  accountant  approved  in  any  particular  case  by  the 
Board  of  Trade.     Within  six  weeks  after  being  requested 
by  the  Minister  of  Munitions,  the  controlled  owner  was 
required   to  deliver  to  him  such  audited  accounts  and 
particulars  in  respect  of  the  controlled  establishment  as 
might  be  required.     As  soon  as  possible  thereafter,  the 
Rules  proceed,  "the  Minister  shall  deliver  to  the  con- 
trolled owner  notice  of  the  amount  at  which  the  Minister 
is  prepared  to  agree  the  standard  amount  of  profits,  and 
unless   within    fourteen   days   thereafter   the   controlled 
owner  shall  serve  upon  the  Minister  notice  of  objection, 
the  said  amount  shall  be  deemed  to  have  been  agreed  and 
to  be  the  standard  amount  of  profits.     If  objection  shall 
«2ibid.  1696-1697. 


38 


WAR    TIME   CONTROL   OF    INDUSTRY 


be  so  served  and  the  Minister  and  the  controlled  owner 
are  unable  to  settle  the  standard  amount  of  profits  by 
agreement,  the  matter  shall  be  remitted  by  the  Minister 
to  the  Referee  for  determination.  The  amount  which 
the  Referee  shall  thereupon  determine  shall  be  deemed 
to  be  the  standard  amount  of  profits,  whether  the  amount 
be  greater  or  less  than  the  amount  to  which  the  Minister 
was  prepared  to  agree  as  aforesaid."  ^^ 

To  achieve  the  triumphant  results  of  the  Ministry  of 
Munitions'  first  year,  interferences  with  the  normal  course 
of  trade  were  necessitated  which  went  beyond  even  the 
control  of  employers'  profits  and  the  restriction  of  trade 
unions'  liberties  and  customs.  Raw  materials  had  to  be 
taken  in  hand  and  watched  at  every  stage  of  their  con- 
version into  finished  munitions  of  war.  "  The  great 
lesson  of  the  early  months  of  the  War,"  Mr.  Montague 
concluded  in  his  August  (1916)  speech  before  Parlia- 
ment, ''  was  that  munitions  cannot  be  obtained  merely  by 
ordering.  You  have  got  to  see  that  the  man  who  takes 
your  orders  has  the  plant  and  the  labour;  you  have  got 
to  follow  up  the  work  process  by  process;  you  have  got 
to  provide  from  the  beginning  to  the  end  everything  that 
is  necessary.  That  is  the  cardinal  principle  of  the  Muni- 
tions Department."^* 

Acting  upon  this  principle,  the  Government  early  in 
19 16  had  turned  to  a  consideration  of  the  supplies  and 
prevailing  prices  of  iron,  steel,  and  copper.     During  191 5 


33  Pari.  Paper,   1915,  No.  353. 
»*  P.  D.  C,  1916,  LXXXV,  1702. 


MUNITIONS    AND    LABOUR 


39 


these  metals  had  advanced  rapidly  on  the  market.     In 
part  this  was  due  to  conditions  of  the  import  trade. 
American  supplies,  available  at  the  beginning  of  the  year, 
became  subject  to  the  home  demand  created  by  orders  for 
munitions  and  soon  semi-steel  could  scarcely  be  obtained. 
Freight  rates,  too,  rose  from  15  s.  to  65  s.  per  ton.     In 
consequence,  the  price  of  bar-steel,  most  in  demand  for 
making  shells,  advanced  from  £7  15  s.  in  January,  1915, 
to  £11  in  July,  and  to  £14  in  December.     American  bil- 
lets, which  early  in  the  war  were  about  £5  per  ton  c.  i.  f., 
commanded,  so  far  as  they  could  be  had,  about  £10  10  s. 
at  the  end  of  the  year.     In  the  British  pig-iron  trade  war- 
rants for  hematite,  which  is  convertible  into  steel,  rose 
from  71  s.  a  ton  in  January  to  115  s.  in  December;  even 
warrants  for  Cleveland,  not  so  convertible,  advanced  dur- 
ing the  same  period  from  55  s.  to  76  s.   11  d.     The  in- 
creased value  of  the  skilled  labour  needed  to  transform 
forge  pig  into  bar  pig  was  reflected  in  the  changed  relative 
prices  of  the  two.     Prices  were  normally  as  i  to  2 ;  they 
had  become  as  i  to  3^.^^ 

Such  was  the  situation  when,  in  January  19 16,  the 
Government  resolved  to  check  any  further  considerable 
rise  in  prices.  Maximum  prices  for  all  finished  iron  and 
steel  goods  were  fixed,^^  prices  which,  as  regards  iron 
bars  and  angles,  were  revised  in  April  and,  as  regards 

85  L.  E.,  Feb.  19,  1916,  pp.  34SH350,  quoting  M.  G.  and  the  Iron 
and  Steel  Trades  Review. 

3«The  Government  already  in  September,  1915,  had  fixed  the 
prices  and  controlled  the  supplies  of  tungsten  and  molybdenum. 
B.  T.  R.,  Oct.  I,  1915,  p.  207;  Nov.  I,  p.  281. 


40  WAR   TIME   CONTROL   OF   INDUSTRY 

extras,  were  again  revised  in  November.  The  stability 
at  once  attained  is  shown  by  the  following  quotations, 
prices  fluctuating  little  during  1916:^^ 

January,  1915     January,  1916      December,  1916 

Steel    ship    plates,    per    ton £  8  £    11  10  s.          £   11   10  s. 

Iron    ship    plates    £7155.  £11                       £    1 1    10  s. 

Steel    sheets    (singles)     £8     5  s.  £    13  10  s.           £    14 

Common    iron    bars     £  8  £    10  10  s.          £10158, 

Heavy    steel    rails     £  6     7  s.  6  d.    £    1 1                      £   10   17  s.  6  d. 

At  the  end  of  February  official  maximum  rates,  con- 
siderably below  those  ruling  in  the  market,  were  set  for 
pig-iron.  On  Tuesday,  February  22,  Cleveland  No.  3 
was  sold  in  Glasgow  for  98  s.  6  d. ;  on  Wednesday  there 
came  rumours  that  the  Government  would  insist  on  trans- 
actions at  82  s.  6  d.  Straightway  the  market  broke  and 
2500  tons  were  sold  at  87  s.  6d.  For  a  month  or  so 
private  transactions  took  place  at  prices  above  the  official 
rate,  but  gradually  *'  settlement  quotations  "  grew  mean- 
ingless and  the  metal  exchanges  in  London  and  Glasgow 
became  lifeless.^® 

The  fixing  of  the  price  of  iron  involved  the  stabilizing 
of  that  of  iron  ore,  a  commodity  imported  in  19 16  to  the 
extent  of  6^  million  tons.  The  Government,  accord- 
ingly, took  steps  to  make  foreign  ore  available  at  fixed 
prices,  manipulating  freights  in  the  process.  But  it  had 
to  give  guarantees,  both  in  the  rates  of  freight  and  in  the 
prices  of  ore,  to  meet  any  differences  between  the  fixed 
prices  and  actual  costs.^^     When  finally  stating  in  April 

»7L.  E.,  Feb.  17,  1917,  p.  331. 

38  Ibid.  Feb.  26,  1916,  p.  435 ;  Mar.  4,  pp.  484-5 ;  Apr.  i,  p.  655 ; 
Apr.  8,  p.  700;  Feb.  17,  1917,  P-  3Z2;  B.  T.  R.  Apr.  i,  pp.  201-203; 
May  I,  pp.  242-244. 

8»  L.  T.,  Jan.  19,  1917. 


MUNITIONS  AND  LABOUR  4I 

the  maximum  prices  for  iron  and  steel,  the  Government 
took  the  precaution  of  remarking  that  they  were  based 
upon  the  abnormal  costs  and  conditions  then  prevailing 
and  must  not  be  assumed  to  be  indicative  of  any  differ- 
ence in  relative  values  which  may  have  obtained  in  the 
several  districts  before  the  war  or  may  obtain  again  after 
the  war.*^ 

To  assure  the  stability  of  prices  the  Government  im- 
mediately, on  February  29,  19 16,  forbade  speculative 
trading.  From  that  day  dealings  in  iron,  steel,  copper, 
zinc,  and  certain  other  metals  become  unlawful  unless 
the  metal  sold  was  in  the  possession  of  the  possessor  and 
unless  the  buyer  made  the  purchase  on  behalf  of  the 
consumer.^  ^  This  action  surprised  the  market  as  much 
as  did  the  fixing  of  maximum  prices,  although  the  pos- 
sibility of  such  a  measure  had  been  hinted  at  by  the 
Minister  of  Munitions.  During  the  two  months  of  the 
year  the  prices  of  copper,  lead,  and  iron,  owing  largely 
to  speculative  dealings,  had  reached  the  highest  level 
since  the  outbreak  of  the  war.  Copper  was  higher  than 
since  1907  and  the  other  metals  had  broken  previous 
records.  In  comparison  with  quotations  of  1913  the  fig- 
ures were:  ^^ 

Highest  price  Highest  price  Lowest  price 

since  the  war           in  igis  in  igi^ 

Copper,  per  ton £108                     £78  £62 

L^ad    35                        22  15 

spelter    120                        27  20 

Iron    98  s.                  70  s.  6  d.  48  s.  6  d. 

*o  B.  T.  J.,  Apr.  13,  1917,  p.  86. 
«D.  F.  M.,   Regulation  30  B. 
*2L.  E.,  Mar.  4,  1916,  p.  447. 


I 


42 


WAR    TIME    CONTROL    OF    INDUSTRY 


In  contrast  with  these  high  levels  iron  was  now 
to  be  sold  at  82  s.  6  d.  The  price  of  copper  could 
not  of  course  be  fixed  since  the  supply  was  imported,*^ 
but  at  least  profits  of  home  speculators  were  henceforth 
eliminated. 

With  prices  of  iron  and  steel  fixed,  the  Government 
took  its  final  steps  to  secure  economy  and  efficiency  in  the 
use  of  these  and  other  metals.  In  order  first  to  insure 
to  the  empire  and  the  Allies  the  entire  home  supply,  it 
increased  in  May,  191 6,  the  restrictions  put  upon  the  ex- 
portation of  iron  and  steel  to  neutrals.  As  early  as  July, 
1 91 5,  the  exportation  of  high-speed  steel  except  under 
license  had  been  prohibited,  on  the  suspicion  that  such 
steel  was  getting  into  Germany  through  neutral  coun- 
tries of  the  continent,  especially  Switzerland.  Only  a 
small  part  of  the  licences  thenceforth  asked  for  were 
granted.^^  From  the  spring  of  19 16  neutral  markets 
were  further  closed,  except  in  so  far  as  the  Ministry  of 
Munitions  through  its  permits  saw  fit  to  adjust  the  bal- 
ance of  trade  by  allowing,  for  example,  steel  rails  to  go 
to  South  America.^^ 

It  was,  however,  the  Government's  endeavour  to  regu- 
late distribution  as  between  home  consumers  that  gave 
rise  to  one  of  the  most  remarkable  of  war-time  devices. 
This  is  embodied  in  what  are  known  as  Priority  Regula- 

*3  Ibid.,  Feb.  17,  1917,  p.  332.  Copper  (cash  standard)  dropped 
to  £96  in  March  as  a  result  of  the  new  order,  but  by  May  was  back 
to  £145.  In  June  there  was  another  decline  to  £88,  but  at  the  begin- 
ning of  1917  the  price  was  £153. 

*4B.  T.  R.,  Aug.  I,  1915,  p.  103. 

«  L.  E.,  Feb.  17,  1917,  p.  331 ;  Aug.  11,  p.  230. 


MUNITIONS   AND    LABOUR 


43 


tions.  The  extension  of  them  to  many  mdustries  and 
the  obstructive  part  which  they  can  so  readily  play  give 
them  a  first-rate  importance. 

First  outlined  in  a  Memorandum  of  August  4,  1916, 
applicable  to  certain  kinds  of  steel,  they  were  more  fully 
embodied  in  an  Order  in  Council  of  November  20,  and 
at  the  same  time  were  extended  to  other  materials.*^     In 
the  beginning  they  affected  only  controlled  establishments, 
but  by  March,   19 17,  more  than  90,000  firms  had  been 
brought  within  their  scope.*^     Briefly  put,  their  purpose 
is  to  secure  to  industries  in  the  order  of  war-time  im- 
portance  supplies   which   are   essential.     They  provide, 
relative  to  steel  and  to  copper  wire,  that  no  order  for  stee/ 
made  by  the  Open  Hearth  or  Bessemer  Process  (other 
than  shell  discard  quality)  or  for  copper  wire  shall  be 
accepted  by  a  manufacturer  unless  the  purpose  for  which 
the  steel  or  the  copper  wire  is  required  has  been  approved. 
Approval  may  be  evidenced  by  an  Admiralty  contract  or 
permit  (always  with  reference  or  number),  a  War  Of- 
fice contract,   a   Marine  Department  of   the  Board  of 
Trade  permit,  a  Ministry  of  Munitions  contract,  a  Com- 
mission Internationale  de  Ravitaillement  or  a  Commission 
Frangaise  sanction,  or  lastly  a  Ministry  of  Munitions  per- 
mit.    The  sanction  of  the  Commissions  and  the  permit 
of  the  Ministry  of  Munitions  require  an  added  ''  Priority 
Classification,"  emanating  from  the  latter  Ministry.     A 
manufacturer,  in  determining  what  order  of  priority  he 

*6B  T.  J.,  Nov.  23,  1916,  p.  574;  D.  R.  M.,  3rd  ed.,  p.  196. 
*^  L.  T.,  Mar.  10,  1917,  p.  7. 


44 


WAR    TIME    CONTROL   OF   INDUSTRY 


I 


MUNITIONS   AND   LABOUR 


45 


should  give  to  the  various  contracts  which  come  before 
him,  each  having  some  one  of  these  endorsements  (as  of 
course  it  must  have  to  get  consideration),  asks  himself 
into  what  "  Class  "  it  falls.  For  there  are  three  Classes 
—  A,  B,  C  —  taking  precedence  in  that  order.  Under 
Class  A  fall  the  first  four  contracts  or  permits  above  de- 
scribed, together  with  certain  Priority  ratings  numbered 
up  to  5  which  the  Ministry  of  Munitions  may  give  to  its 
own  permit  or  to  the  sanctions  of  the  Commissions, 
Class  B  includes  merely  Priority  rating  6  under  a  Minis- 
try of  Munitions  permit.  Class  C  includes  all  Ministry 
of  Munitions  permits  other  than  these.  Behind  this 
somewhat  confusing  classification  is  the  simple  principle 
that  work  of  immediate  importance  for  the  prosecution  of 
the  war  must  either  carry  with  it  a  contract  from  the  Ad- 
miralty, War  Office,  or  Ministry  of  Munitions,  or  must 
get  for  itself  a  permit  from  the  Ministry  of  Munitions 
placing  it  in  Class  A;  work  of  indirect  importance  for 
the  war,  or,  as  the  phrase  runs,  of  national  importance, 
must  get  from  the  Ministry  of  Munitions  a  permit  placing 
it  in  Class  B ;  work  not  contributory  to  the  war  will,  under 
its  Ministry  of  Munitions  permit,  be  rated  in  Class  C. 

A  manufacturer  in  executing  a  contract  must  give  it 
the  priority  to  which  its  class  entitles  it;  if  it  be  in  Class 
A,  he  must  also  give  it  the  priority  to  which  its  priority 
rating  or  classification  within  that  class  entitles  it.  Or- 
ders for  steel  for  guns,  mortars,  gun  mountings,  gun  car- 
riages and  parts  thereof,  for  instance,  are  to  be  executed 
under  Priority  Classification  i,  which  comprises  most 


J 


urgent  war  work.  Each  week  manufacturers  must  make 
to  the  Director  of  Steel  Production  full  returns  of  all 
steel  manufactured  or  delivered.  They  may  manufac- 
ture no  steel  other  than  that  of  shell  discard  quality  for 
any  order  below  Class  B.  No  steel  except  of  this  quality 
may,  in  other  words,  be  used  in  work  which  is  not  either 
direcdy  or  indirectly  of  military  importance. 

Orders  for  steel  of  shell  discard  quality,  if  for  home 
consumption,  may  be  accepted  without  contract  reference 
or  Ministry  of  Munitions  permit,  although  the  purpose 
of  the  order  must  be  ascertained  and  entered  on  the  re- 
turn; if  the  steel  is  for  export,  such  orders  must  have  a 
permit  from  the  Ministry  of  Munitions  and  particulars 
must  be  given  as  to  purpose  and  country  of  destination. 
If  the  steel  is  to  go  to  European  neutrals,  application  is 
best  made  first  to  the  War  Trade  Department,  which  ar- 
ranges with  the  Ministry  of  Munitions  for  the  issue  of  a 
priority  certificate  and  later  grants  the  export  licence.^® 

The  next  step  in  developing  the  principle  of  priority 
in  industrial  work  was  to  extend  it  from  the  acceptance 
of  contracts  to  the  employment  of  labour.  On  Decem- 
ber 19,  19 16,  Mr.  Lloyd  George,  in  announcing  the  policy 
of  the  new  Government,  said  that  the  War  Cabinet  would 
put  into  effect  the  plan  for  universal  national  service  al- 
ready adopted  by  the  late  Government  and  about  to  be 
announced.  There  would  be  a  new  Director  of  National 
Service,  Mr.  Neville  Chamberlain,  Lord  Mayor  of  Bir- 
mingham.    By   him   industries   and   services   would   be 

*8  B.  T.  J.,  Nov.  16,  1916,  p.  506. 


46 


WAR    TIME    CONTROL   OF    INDUSTRY 


scheduled  according  to  their  essential  utility  in  war  time. 
Labour  would  at  once  be  invited  to  enroll  for  war  work 
and,  should  it  not  respond  voluntarily,  the  Government 
would  assume  compulsory  powers.  Workers  would 
thereupon  be  set  free  from  non-essential  pursuits  to  per- 
form more  essential  services.'*^ 

On  February  28,  191 7,  accordingly,  there  was  issued 
a  Restricted  Occupations  Order.     After  calling  attention 
to  many  trades  and  occupations  which  the  Government 
had  declared  to  be  of  primary  importance,  trades  which 
were  later  designated  as  those  to  which  National  Service 
Volunteers  might  be  transferred,  the  Order  named  other 
trades  not  thus  important.     Such,  for  example,  are  the 
making  of  machines,   implements,  and  conveyances   for 
domestic  use,  the  working  of  stone  and  slate,  house  build- 
ing and   repairing,   the  manufacture  of  pottery,  bricks, 
glass,  paper,  beer,  cigars,  fancy  clothing,  millinery,  and 
carpets.     In  these  trades  no  employer  might  henceforth 
take  into  his  occupation,  whether  to  fill  a  vacancy  or  other- 
wise, any  man  between  the  ages  of  17  and  61,  even  if  the 
man  had  been  previously  so  employed.     Exceptions  were 
made  only  if  the  employer  re-employs  a  soldier  properly 
retired  or  if  he  himself  is  executing  work  of  national  im- 
portance.    All  employers  in  these  trades  must  give  any 
government  contract  preference  and  must  keep  the  Di- 
rector General  of  National  Service  informed  of  the  na- 
ture and  amount  of  the  work  done  in  their  factories.^^ 

*»P.  D.  C,  1916,  LXXXVIII,  1352-3. 

60  B.  T.  J.,  Mar.  i,  1917,  p.  614;  Mar.  8,  p.  666;  Mar.  15,  p.  ^2'7, 


MUNITIONS   AND   LABOUR 


47 


Thus  in  the  concentration  of  all  the  energies  of  the  na- 
tion upon  industries  conducive  to  military  ends,  indus- 
tries not  so  conducive  were  pushed  to  the  wall. 

To  supervise  and  extend  all  these  economies,  the  Minis- 
ter of  Munitions  in  November,  19 16,  appointed  a  Com- 
mittee under  the  chairmanship  of  Mr.  C.  W.  Fielding. 
It  was  instructed  to  '*  consider  and  suggest  the  action  nec- 
essary to  secure  economies  in  metals  and  materials  as  re- 
gards their  use  in  munitions  of  war,  taking  into  con- 
sideration matters  affecting  design,  methods  of  purchase, 
stocks,  imports,  distribution,  and  control,"  and  it  was  em- 
powered "  to  take  such  evidence  as  may  be  necessary 
both  from  the  Departments  of  the  Ministry  and  from 
manufacturers."  ^^ 

By  the  spring  of  19 17  the  Government  was  therefore 
in  pretty  complete  control  of  the  vast  business  of  manu- 
facturing munitions,  especially  in  control  of  the  supply 
of  iron  and  steel.  Its  first  endeavour  had  been  to  enlist 
in  its  service  private  engineering  and  shipbuilding  firms 
and  to  attempt  the  mobilization  of  labour;  it  had  ended 
by  fixing  the  price  of  iron  and  steel,  by  determining  the 
allotment  of  these  and  other  metals  to  the  manufacturer, 
and  by  directing  the  supply  of  labour  into  essential  trades. 
It  had,  in  short,  extended  its  control  from  producer  to 
consumer,  undertaking  almost  everything  except  the  ap- 
propriation of  the  mines  and  the  works.  There  remains 
only  to  consider  the  success  of  its  ventures. 

On  the  side  of  the  employer  there  was  little  to  complain 

51  B.  T.  J.,  Nov.  30,  1916,  p.  656;  Jan.  4,  1917,  p.  27. 


48 


WAR    TIME    CONTROL   OF    INDUSTRY 


MUNITIONS   AND   LABOUR 


49 


of,  except  that  non-essential  trades  were  of  course  pros- 
pering less  and  less.  A  more  liberal  export  policy  would 
have  been  welcomed  in  some  quarters,  since  certain  com- 
modities could  thus  have  shared  in  the  higher  prices  which 
prevailed  in  the  world  market.  But  all  steel,  munitions, 
and  shipbuilding  works  continued  to  be  crowded  with 
orders,  chiefly  from  the  Government,  and  week  after  week 
the  reports  are  that  business  is  active.  Inasmuch  as 
prices  for  iron  and  steel  had  been  fixed  at  the  relatively 
high  figures  prevailing  early  in  19 16  and  since  all  con- 
trolled establishments  had  been  given  a  liberal  margin 
of  profit,  there  was  little  friction  between  the  Govern- 
ment and  the  manufacturer. 

Different,  however,  was  the  attitude  of  labour.  It  has 
been  explained  that  the  conferences  of  the  Government 
with  labour  leaders  in  the  spring  of  191 5  and  the  sub- 
sequent Munitions  of  War  Act  made  provision  for  the 
dilution  of  labour,  for  the  impossibility  of  the  work- 
man's leaving  his  employment  without  certificate,  for  his 
working  full  time,  and  for  compulsory  arbitration.  Op- 
position to  these  measures  led  Mr.  Lloyd  George,  it  will 
be  remembered,  to  charge  the  unions  at  the  end  of  19 15 
with  breaking  their  pledge. 

Open  defiance  of  the  Government  developed  in  the 
strike  of  the  "  Clyde  Workers  Committee "  late  in 
March,  19 16.  The  general  purpose  of  this  strike  was  to 
force  the  repeal  of  the  Munitions  of  War  Act  and  of  the 
Military  Service  Act  by  holding  up  war  supplies.  Re- 
sponsible trade  union  leaders  in  the  Clyde  district  had 


acquiesced  in  the  dilution  of  labour,  but  not  so  all  the 
men.  A  dispute  arose  as  to  whether  stewards  should  be 
allowed  to  interrupt  their  own  work  and  go  into  other 
departments  to  inspect  arrangements  for  the  dilution  of 
labour.  The  employers  objected  to  such  interruption 
but  offered  to  submit  to  the  Clyde  Commissioners  and  to 
give  the  men's  representatives  facilities  for  ascertaining 
what  was  being  done  under  the  dilution  scheme.  The 
men  struck,  but  strike  and  strikers  were  repudiated  by 
the  Amalgamated  Society  of  Engineers.  The  Govern- 
ment acted  promptly.  It  arrested  nine  leaders  and  con- 
veyed them  to  the  East  Coast  on  a  charge  of  delaying  the 
production  of  munitions  in  a  controlled  establishment. 
Its  position  was  in  every  way  stronger  than  when  it  tried 
to  apply  the  Munitions  of  War  Act  to  the  South  Wales 
miners  in  the  preceding  June,  and  within  a  week  the 
strike  was  at  an  end.'^^  Fourteen  months  later  the  de- 
ported men  were  allowed  to  return  to  their  homes.^^ 

In  the  late  spring  of  191 7  differences  arose  between 
the  Government  and  the  Amalgamated  Society  of  En- 
gineers which  threw  much  light  upon  the  two  years'  work- 
ing of  the  Munitions  of  War  Act.  Since  the  Clyde 
workers'  strike  there  had  been  relatively  few  interrup- 
tions of  industry.  The  workmen  had,  in  general,  mani- 
fested an  excellent  spirit  and  their  grievances  had  been 
adjusted,  though  often  with  delay,  by  such  arbitration 
tribunals  as  the  Committee  on  Production  or  the  new 

"A.  R.,  1916,  pp.  94-96;  P.  D.  C,  LXXXI,  913-915- 
63  L.  T.,  May  30,  1917,  p.  7. 


50 


WAR    TIME    CONTROL   OF    INDUSTRY 


Ministry  of  Labour.  By  May,  19 17,  however,  causes 
for  complaint  had  developed.  It  had  come  about  that 
employers  more  and  more  endeavoured  to  substitute 
"  piece-work  "  schedules  for  time  schedules,  and  the  re- 
muneration under  these  was  felt  to  be  unsatisfactory. 
The  inability  to  change  employers  without  a  leaving  cer- 
tificate was  irksome.  Suspicion  was  growing  that  the 
introduction  of  labour-saving  machines  and  the  employ- 
ment of  unskilled  operatives  was  for  ever  rendering  im- 
possible a  return  to  pre-war  conditions. 

To  these  general  causes  of  dissatisfaction  were  added 
two  specific  ones.  That  the  execution  of  the  Military 
Service  Act  of  May,  19 16,  might  be  facilitated,  the  Gov- 
ernment had  introduced  a  trade-card  system,  which  gave 
the  trade  unions  virtual  control  of  exemptions  as  among 
their  own  men.  This  system  was  now  withdrawn,  and 
distrust  arose  lest  the  War  Office  was  planning  to  enlist 
skilled  workmen.  At  the  same  time  a  Munitions  of  War 
(Amendment)  Bill  was  introduced  in  the  Commons, 
authorizing  the  dilution  of  labour  in  private  works  as 
Avell  as  in  munitions  establishments.  Owing  to  the  great 
expansion  of  its  undertakings,  the  Ministry  of  Munitions 
explained,  it  had  need  of  more  skilled  workmen  than  were 
in  its  service  at  the  moment.  The  need  could  be  supplied 
only  by  withdrawing  trained  men  from  private  works 
and  compensating  for  their  withdrawal  by  adding  un- 
skilled workers.  Although  the  Government  had  two 
years  before  promised  not  to  extend  dilution  in  this 
way,  it  now  asked  to  be  relieved  of  its  promise.     To  the 


MUNITIONS   AND   LABOUR 


51 


request  many  unions  assented,  but  the  Amalgamated  So- 
ciety of  Engineers  did  not.  When  the  bill  was  about  to 
be  brought  up  in  the  Commons,  the  engineers  began  to 
leave  off  work  and  by  the  end  of  May  a  silent  but  formid- 
able strike  was  in  progress.'^^ 

At  this  point  the  Government  took  measures  to  repair 
the  situation.  The  Minister  of  Munitions  entered  upon 
a  series  of  conferences  with  the  representatives  of  unions 
belonging  to  the  Shipbuilding  and  Engineering  Trades 
Federation,  and  the  Prime  Minister  announced  the  ap- 
pointment of  a  Commission  to  inquire  into  the  causes  of 
industrial  unrest.  As  a  result,  by  the  middle  of  June, 
the  engineers  returned  to  work,  and  important  changes 
were  introduced  into  the  proposed   Munitions  of  War 

Bill. 

The  suggested  changes  in  the  bill  were  explained  by 
Dr.  Addison  to  some  250  delegates  of  the  Amalgamated 
Society  of  Engineers  on  June  13.  The  Government,  that 
it  might  secure  the  necessary  skilled  labour  where  na- 
tional interest  required  it,  would  have  to  extend,  as  it 
had  planned,  the  dilution  of  labour  to  certain  private  es- 
tablishments, and  would  have  to  declare  certain  classes 
of  work,  such  as  the  manufacture  of  agricultural  ma- 
chinery, munitions  work.  When,  however,  such  exten- 
sion was  to  be  ordered,  notice  of  it  would  be  widely  given 
in  the  newspapers  and  three  weeks  would  be  allowed  for 
the  receipt  of  any  protest  from  the  trade  unions  con- 
cerned and  for  action  thereon.     Prohibition  of  the  right 

5*M.  G.,  May  14,  19,  26,  1917;  New  Statesman,  May  19,  Je.  9. 


52 


WAR    TIME    CONTROL   OF    INDUSTRY 


MUNITIONS   AND   LABOUR 


53 


to  strike  would  not  be  extended  to  workers  in  these 
private  establishments.  Dilution  of  labour  in  such  es- 
tablishments would  cease  at  once  at  the  close  of  the  war 
and  any  employer  seeking  to  continue  it  would  be  liable 
to  a  fine  of  £5  a  day  for  each  man  affected.  Not  only 
were  these  concessions  proposed  relative  to  dilution  of 
labour,  but  to  placate  the  unions  other  changes  in  condi- 
tions of  labour  were  suggested.  A  wage  award,  ap- 
plicable to  the  employers  of  a  single  firm,  might  be 
extended  by  the  Ministry  of  Munitions  to  all  workers 
similarly  employed  upon  munitions  work.  Arbitration 
tribunals  should,  if  possible,  make  their  award  within 
fourteen  days  from  the  date  of  reference.  Compulsory 
arbitration  should  not  continue  for  twelve  months  after 
the  war,  as  provided  in  the  Munitions  of  War  Act,  191 5, 
but  liberty  would  at  once  be  restored  to  the  unions. 
Finally,  the  leaving  certificate  would  be  abolished,  al- 
though an  employer  might  not  take  on  a  man  leaving 
munitions  work  for  private  work  without  the  consent  of 
the  Ministry  of  Munitions,  nor  might  he  "  poach,"  i.  e., 
offer  to  pay  a  skilled  worker  more  than  he  was  paying  his 
own  men  similarly  skilled.^^  These  were  the  Govern- 
ment's preliminary  concessions. 

Meanwhile  the  Commission  of  Inquiry  into  Industrial 
Unrest,  appointed  on  June  12,  worked  so  speedily  that 
its  task  was  finished  by  July  17.  Upon  it  sat  many  repre- 
sentatives of  labour  and  to  secure  expedition  it  subdivided 
itself  into  eight  Commissions,  each  devoting  itself  to  a 

55  L.  T.,  Je.  14,  1917,  p.  2. 


different  part  of  England,  Scotland,  or  Wales.  Each 
commission  met  from  ten  to  thirty  times  and  examined 
from  100  to  200  witnesses. 

Of  its  report  Mr.  G.  N.  Barnes  made  a  useful  prelimi- 
nary survey,  explaining  the  general  causes  of  unrest  as 
follows.^^  All  Commissions  agreed  that  the  most  im- 
portant cause  —  and  one  colouring  subsidiary  causes 
which  alone  might  have  brought  no  complaint  —  was  the 
high  cost  of  food  in  relation  to  wages,  conjoined  with  the 
unequal  distribution  of  food.  Men  felt  that  sections  of 
the  community  were  profiteering.  The  Commissioners, 
therefore,  recommended  an  immediate  reduction  in  the 
price  of  food,  any  loss  accruing  therefrom  to  be  borne  in 
part  at  least  by  the  state.  They  also  recommended  a 
better  system  of  distribution. 

Much  discontent  arose  from  the  working  of  the  Muni- 
tions of  War  Act  and  the  abrogation  of  trade  union 
privileges.  In  the  first  place,  personal  freedom  was  re- 
stricted by  workmen  being  tied  to  particular  factories. 
Many  so  tied  were  unable  to  get  wages  commensurate 
with  their  skill,  the  wages  of  skilled  men  often  being  less 
than  those  of  the  unskilled.  In  the  second  place,  changes 
regarding  working  conditions,  especially  the  introduction 
of  female  labour,  had  been  made  without  consulting  the 
men.  Lack  of  confidence  in  the  Government  was  thereby 
generated  and  a  feeling  that  promises  regarding  trade 
union  customs  would  not  be  kept.     Lastly,   there  had 

56  The  Report  is  Cd.  8662-5869;  Mr.  Barnes'  summary  is  in  L.  T., 
Jy.  2Z,  1 91 7,  pp.  7-^- 


54 


WAR    TIME    CONTROL   OF    INDUSTRY 


been  delay  in  the  settlement  of  disputes.  In  some  in- 
stances ten  weeks  had  elapsed  without  a  settlement,  but 
a  strike  put  the  matter  right  in  a  few  days.  In  one  case, 
employers  and  men  came  to  an  agreement,  but  the  Min- 
istry of  Munitions  withheld  its  assent,  with  the  result 
that  fourteen  weeks  were  required  to  get  a  decision  from 
the  Committee  on  Production,  the  men  meanwhile  stop- 
ping work.  This  last  episode  illustrated  another  charge 
brought  against  the  Government  —  the  lack  of  co-ordina- 
tion between  departments  dealing  with  labour. 

To    obviate    these    occasions    for    dissatisfaction    the 
Commission   offered   various   remedies.     Labour   should 
take  part  in  the  affairs  of  the  community  as  partners 
rather  than  as  servants ;  the  leaving  certificate  should  be 
abolished  or  modified;  the  Government  should  make  an 
authoritative  statement  when  it  introduces  changes  to  in- 
crease output ;  it  should  also  make  a  statement  as  to  vari- 
ation from  pledges  already  given ;  there  should  be  better 
administrative  machinery  for  dealing  with  labour  —  one 
central  authority  with  local  boards  for  local  disputes,  or  a 
local  commissioner  with  technical  knowledge;  lastly,  the 
principle  of  the  Whitley  Report  should  be  adopted.     This 
Report,  made  in  June,   19 17,  recommended  the  forma- 
tion of  joint  standing  industrial  councils  in  the  several 
industries  where  they  do  not  already  exist,  councils  com- 
posed of  representatives  of  employers  and  employed,  in 
the  workshops,  in  districts,  and  nationally,  to  strive  for 
closer  co-operation  between  employers  and  employed. 
Other  causes  of  unrest  the  Commission  discovered. 


MUNITIONS   AND   LABOUR 


55 


One,  quite  as  widespread  as  the  cost  of  food  and  the  in- 
fringement upon  union  privileges,  was  the  friction  oc- 
casioned by  the  Military  Service  Acts.     To  be  sure,  the 
irritation  caused  by  the  hasty  and  unheralded  withdrawal 
of  the  trade-card  scheme  had  subsided,  but  there  was 
fresh  anxiety  over  the  working  of  the  Schedule  of  Pro- 
tected Occupations,  which  would  need  careful  handling. 
Some  causes  were  not  general,  but  were  none  the  less 
acute.     Insufficient  housing  accommodations,   a  scanty 
supply    of    acceptable   beer,    inconsiderate   treatment   of 
women,  whose  wages  were  sometimes  as  low  as  13  s.,  in- 
adequacy of  the  £1  weekly  maximum  of  the  Workmen's 
Compensation  Act,  delays  in  granting  pensions  —  all  were 
irritants  in  one  region  or  another,  but  for  the  most  part 
they  have  no  immediate  connection  with  the  Govern- 
ment's wartime  control  of  industry.     One  which  did  have 
such  connection  the  Government  to  some  extent  promptly 
remedied.     By   an   Order,   effective   August    15,    19 17, 
women  of  18  and  over  were  to  receive  an  advance  in 
wages  of  2  s.  6  d.  per  week  and  girls  under  18  an  advance 
of  IS.  3d.,  provided  they  were  employed  on  munitions 
work  in  controlled  establishments  or  in  uncontrolled  ones 
to   which   orders   of   the   Ministry   regulr.ting  women's 
wages  had  already  been  applied.^"^ 

While  the  Commission  made  its  investigations  and 
formulated  its  report,  the  new  Minister  of  Munitions, 
Mr.  Winston  Churchill,  continued  the  negotiations  with 
the  trade  unions.     Upon  these  negotiations,  and  also  in  a 

"  L.  T.,  Aug.  3,  1917,  p.  3. 


56 


WAR    TIME    CONTROL   OF   INDUSTRY 


I  <! 


measure  upon  the  Commission's  report,  depended  the 
form  finally  assumed  by  the  Munitions  of  War  (Amend- 
ment) Bill.  By  the  end  of  August  a  part  of  this,  but 
not  all  of  it  as  at  first  formulated,  became  law.  The 
clause  upon  which  the  Government  had  been  most  intent 
was  at  length  omitted  —  the  one  permitting  the  extension 
to  private  establishments  of  the  dilution  of  labour.  To 
this  provision  the  Amalgamated  Society  of  Engineers 
maintained  its  opposition  and  refused  representation  upon 
the  Trade  Unions  Advisory  Committee,  which  Mr. 
Churchill  was  trying  to  form,  so  long  as  the  clause  was 
retained.  Rather  than  continue  the  friction  which  Gov- 
ernmental insistance  would  have  produced,  the  Minister 
of  Munitions  yielded,  anxious  though  he  was  to  extend 
dilution.  Further  legislation  along  these  lines  he  post- 
poned until  the  autumn  session  of  Parliament. 

On  the  other  hand,  the  provision  which  the  unions  were 
most  anxious  to  see  included  in  the  bill  was  incorporated. 
The  Minister  of  Munitions  was  given  the  power  to  abol- 
ish leaving  certificates.  Why  such  abolition  could  not 
take  place  for  some  six  weeks,  Mr.  Churchill  explained 
in  the  House.  As  the  Commission  had  pointed  out, 
many  skilled  men  were  at  the  moment  receiving  for  time- 
work  relatively  lower  wages  than  unskilled  newcomers 
were  paid  for  piece  work.  To  abolish  the  leaving  cer- 
tificate at  once  would  encourage  skilled  but  underpaid 
men  to  leave  their  employment.  Arrangements  for  re- 
munerating them  fittingly,  he  remarked,  were  the  first  es- 
sential.    On  the  passage  of  the  bill,  the  readjustment  in 


MUNITIONS   AND   LABOUR 


57 


question  was  undertaken  and  soon  it  was  announced  that 
after  October  15,  19 17,  leaving  certificates  would  be  abol- 
ished.^^ The  readjustment  involved  an  advance  of  12 
per  cent,  in  the  wages  of  skilled  munitions  and  ship-yard 
time-workers.  Eventually  unskilled  time-workers  had 
to  be  given  the  same  increase  to  keep  them  from  going 
over  to  piece-work.  Altogether  900,000  men  had  their 
wages  advanced  by  £14,000,000  a  year.^^  Thus  two 
of  the  most  irritating  grievances  growing  out  of  the 
Munitions  of  War  Act,  the  inability  of  workmen  to 
change  their  employment  and  the  inadequate  compensa- 
tion often  received  by  them  in  the  shop  which  they 
could  not  leave,  were  satisfactorily  remedied. 

At  the  same  time  another  recommendation  of  the  Com- 
mittee on  Industrial  Unrest  received  the  Government's 
attention.     As  a  result  of  Mr.  Churchill's  vigorous  ef- 
forts, a  committee  of  trade  unionists  was  appointed  to 
advise  the  Minister  of  Munitions  on  industrial  questions. 
As  soon  as  the  abolition  of  leaving  certificates  was  an- 
nounced, this  new  Trade  Unions  Advisory  Committee 
exerted  its  influence  and  issued  an  appeal  to  munition 
workers.     Pointing  out  that,  if  a  large  number  of  them 
left  their  work  at  once,  the  output  of  essential  munitions 
would  be  impaired,  it  urged  them  at  least  to  give  notice 
of  intention  to  leave  or,   far  better,  to  enrol  as  War 
Munitions  Volunteers.     The  volunteer  scheme  had  been 
so  extended,  the  Committee  indicated,  as  to  insure  to  men 

58  L.  T.,  Aug.  16,  1917,  p.  10;  Aug.  2-^,  p.  8;  Sept.  26,  p.  3. 
69  Ibid.,  Nov.  29,  p.  10. 


58 


WAR   TIME   CONTROL   OF   INDUSTRY 


MUNITIONS   AND   LABOUR 


59 


t 


<♦ 


working  away  from  home  a  subsistence  allowance  if 
they  should  enrol  and  be  assigned  to  the  establishments  in 
which  they  were  then  working.  Railway  passes,  too, 
on  public  holidays  would  be  given.^^  Thus  the  per- 
suasion which  the  Government  wished  to  exert  was  voiced 
by  an  authoritative  committee  of  the  men  themselves  and 
the  creation  of  a  mediatory  body  at  once  proved  its  value. 
A  final  step  was  the  adoption  of  the  recommendation 
of  the  Committee  on  Industrial  Unrest  which  related  to 
the  establishment  of  the  Joint  Standing  Industrial  Coun- 
cils proposed  in  the  Whitley  report.  During  the  war, 
the  Government  pointed  out  in  announcing  its  decision, 
authoritative  bodies,  representative  of  both  employers  and 
employes  in  a  trade,  could  seldom  be  found.  Frequently 
it  had  wished  to  confer  with  such  bodies,  but  had  been 
unable  to  do  so.  Need  for  them  would  exist  after  the 
war  quite  as  much  as  during  its  progress.  At  all  times 
they  should  conduce  to  insuring  a  satisfactory  under- 
standing between  employers  and  men.  The  Government, 
therefore,  proposed  to  create  such  councils  and  in  the 
future  regard  them  as  official  standing  consultative  com- 
mittees. With  them  it  would  confer  on  questions  affect- 
ing the  industries  which  they  respectively  represented. 
Each  trade  should  constitute  its  own  council,  the  councils 
in  turn  electing  their  own  officers  and  determining  their 
own  functions  and  procedure.  Where  an  industry  was 
based  on  district  organization,  this  might  well  be  reflected 
in  district  councils  rather  than  in  a  national  council,  which 

•<>  Ibid.,  Sept.  26,  1917,  p.  3. 


would  be  appropriate  to  a  trade  organized  on  a  national 
basis.  Members  of  the  councils  would  be  representatives 
of  existing  organizations  of  employers  and  workmen,  al- 
though the  councils  themselves  might  grant  representa- 
tion to  new  bodies  coming  into  existence.  All  interests 
within  a  trade  ought  to  be  given  opportunity  to  express 
themselves.  Co-operation  of  all  elements  within  an  in- 
dustry, the  Government  concluded,  would  do  much  to 
setde  problems  of  reconstruction  after  the  war.^^ 

The  spirit  of  compromise  and  conciliation  thus  mani- 
fested by  the  Government  in  the  adoption  of  certain  rec- 
commendations  of  the  Committee  on  Industrial  Unrest 
argued  well  for  the  future.     One  popular  grievance,  how- 
ever, surpassed  in  gravity  any  discontent  arising  from 
the  Munitions  of  War  Bill.     This  was  the  high  cost  of 
living  and  the  belief  that  the  Government  had  not  done 
all  in  its  power  to  prevent  rising  prices.     As  it  happened, 
the  late  summer  and  the  autumn  of  1917  saw  remedial 
measures  adopted  in  these  matters  as  well.     Maximum 
prices  were  fixed  in  one  commodity  after  another,  that 
for  bread  being  so  favourable  that  a  state  subsidy  was 
mvolved.     The  description  of  these  measures  belongs  to 
another  chapter,  but  the  cumulative  effect  of  them  should 
not  be  forgotten  when  other  action  directed  toward  the 
same  end  is  considered.     The  raising  of  the  wages  of 
underpaid  munitions  workers,  the  abolition  of  leaving 
certificates,  the  establishment  of  a  Trades  Union  Advisory 
Committee,  the  creation  of  Joint  Industrial  Councils  were, 
«i  Ibid.,  Oct.  25,  p.  8. 


6o 


WAR   TIME    CONTROL   OF    INDUSTRY 


quite  as  much  as  the  new  food  regulations  of  19 17,  di- 
rected toward  the  conciliation  of  labour.  Without  the 
co-operation  of  the  workmen  it  was  clear  that  the  war 
could  not  be  won,  and  the  attitude  of  a  large  part  of  the 
Labour  group  toward  the  Stockholm  conference  brought 
home  to  the  Government  the  necessity  of  a  conciliatory 
policy.  If  there  was  to  be  a  further  taking  of  men  for 
the  army,  every  possible  concession  was  desirable;  for  a 
measure  of  this  sort  would,  as  had  been  shown  by  the 
temper  of  the  men  in  the  summer,  be  most  unacceptable, 
and  the  successful  prosecution  of  the  war  might  easily 
be  involved. 


THE  COAL  MINES 


Whereas  the  Government  promptly  and  without  ques- 
tion took  over  the  railways,  and  less  promptly,  though 
with  equal  decision,  assumed  control  of  plants  which 
could  make  munitions,  it  took  over  the  mines  only  after 
more  than  two  years  and  then  did  so  with  evident  re- 
luctance. Where,  too,  the  administration  of  the  railways 
and  of  munitions  works  involved  it  in  no  insoluble  difficul- 
ties, the  problem  of  the  mines  was  intricate  and  baffling. 
This  assumed  three  main  aspects.  The  first  was  a  falling 
off  in  the  output  of  coal,  which  affected  one  of  Great 
Britain's  important  exports  and  involved  at  a  critical  time 
the  balance  of  trade.  The  second  was  the  enhanced 
price  of  coal  in  the  home  market,  creating  discontent  and 
a  belief  that  the  profits  of  owners  or  dealers  were  unduly 
large.  The  third  was  the  revolt  of  one  of  the  most  pow- 
erful and  irreconcilable  groups  of  men  in  the  country, 
the  Miners'  Federation,  especially  the  branch  of  it  resi- 
dent in  South  Wales.  Since  difficulties  arose  in  pretty 
much  this  sequence,  they  may  be  so  described. 

By  February,  19 15,  both  the  decreased  output  and  the 
increased  price  of  coal  attracted  the  attention  of  the 
House  of  Commons  and  of  the  Ministry.  Two  Com- 
mittees were  appointed  to  report,  one  on  each  subject. 
The  Committee  concerned  with  output  ^  made  its  first 

1  Committee  on  Conditions  prevailing  in  the  Coal  Mining  Indus- 
try due  to  the  War.     Appointed  Feb.  23,  1915. 

61 


62 


WAR    TIME    CONTROL   OF   INDUSTRY 


report  on  May  27,  191 5,  another  report  in  December  of 
that  year,  and  a  third  in  September,  1916.^ 

Up  to  the  end  of  February,  191 5,  according  to  its  first 
findings,  the  net  decrease  in  the  number  of  persons  em- 
ployed in  the  mines  was  134,186,  or  133^  per  cent,  of 
the  number  employed  in  July,  19 14.  The  average  de- 
cline in  output  from  August,  1914,  to  February,  1915, 
compared  with  the  average  output  of  the  twelve  preced- 
ing months,  was  also  133^  per  cent.  (3,044,329  tons 
monthly).  The  decline  was  easily  accounted  for  by  the 
enlistments,  191,170  miners  having  joined  the  colours  up 
to  the  end  of  February.  But  explanation  was  not  rem- 
edy and  the  falling  off  in  output  W'Ould,  if  continued,  re- 
duce the  year's  production  by  some  36  million  tons. 
Even  if  the  normal  exportation  of  24  million  tons  to  Rus- 
sia, Germany,  Austria,  and  Belgium  was  deducted  from 
this  deficit,  there  would  still  remain  a  shortage  of  12  mil- 
lion tons.  The  home  demand  was  not  likely  to  decrease 
since  certain  industries  were  very  active. 

Under  the  circumstances  the  Committee  thought  it 
questionable  whether  further  recruiting  among  the  miners 
should  be  encouraged  —  for  the  miners  had  proved  ener- 
getic recruiters.  Turning  to  the  possibility  of  increasing 
the  output  under  existing  circumstances,  the  Committee 
entertained  no  doubt  that  much  could  be  done  if  the  will 
were  not  wanting.  Absenteeism  was  the  dominant  evil. 
Although  it  had  declined  from  10.7  per  cent,  to  9.8  per 

2  Cd.  7939.  8147,  8345. 


THE   COAL   MINES 


63 


cent,  if  the  seven  months  of  war  were  compared  with  the 
preceding  seven  months,  still  4.8  per  cent  of  that  which 
still  prevailed  was  avoidable.  Were  there  no  unavoid- 
able absenteeism,  the  output  of  coal  would  be  from  13 
to  14  million  tons  greater  during  the  year  than  it  then 
was.  The  12  million  tons  shortage  would  disappear. 
Among  its  recommendations  therefore  the  Committee 
placed  first  a  proposal  that  miners  be  urged,  preferably 
by  the  executive  of  the  Miners'  Federation,  to  eliminate 
all  avoidable  absenteeism.  Should  this  fortunate  result 
be  attained,  the  demands  of  the  home  and  the  existent 
foreign  market  could  be  met.  Holidays  too  might  be 
curtailed.  Lord  Kitchener's  appeals  at  Easter  and  Whit- 
suntide had  been  not  unsuccessful  and  1,000,000  addi- 
tional tons  of  coal  had  been  raised. 

Other  devices  for  increasing  output  the  Committee  con- 
sidered but  with  less  enthusiasm.  A  suspension  of  the 
Eight  Hours  Act  of  1908  would  not  affect  the  Northern 
coalfields,  since  before  its  passage  the  hewers  (not  the 
transit  hands)  already  worked  only  seven  hours  and 
would  not  now  work  longer  unless  serious  emergency 
could  be  shown.  In  Lancashire,  Yorkshire,  and  South 
Wales,  however,  where  men  repair  their  working  places, 
as  the  hewers  farther  north  do  not,  the  addition  of 
twenty  or  thirty  minutes  to  the  working  day  would  be 
helpful.  No  further  employment  of  women  or  boys  was 
recommended.^     If  home  needs  were  not  being  met,  ex- 

3  At  the  end  of   1913,  6554  women  were  employed  on  light  sur- 


64 


WAR   TIME   CONTROL   OF   INDUSTRY 


port  should  be  restricted,  but  not  in  so  far  as  the  ex- 
ported coal  served  the  British  mercantile  marine  and 
British  allies  or  secured  such  essential  return  cargoes  as 
grain  from  the  Argentine  and  iron  ore  from  Bilbao. 
Lastly,  the  Committee  urged  economy  on  the  part  of  the 
public.  The  shortage  could  be  met  quite  as  effectively 
by  a  wise  restriction  of  demand  as  by  an  increase  of  the 
supply.* 

Before  the  report  was  published,  the  Government  had 
acted  in  accordance  with  one  of  its  recommendations. 
By  order-in-council,  effective  May  13,  191 5,  it  assumed 
powers  to  prohibit  the  export  of  coal  to  neutral  countries, 
to  provide  adequate  supplies  at  reasonable  prices  for  the 
British  navy  and  for  the  navies,  railways,  and  national 
requirements  of  the  Allies,  and,  finally,  to  ensure  a  more 
regular  supply  for  the  home  market.  Thenceforth  no 
coal  might  be  shipped  without  the  assent  of  the  War 
Committee  of  the  Board  of  Trade.  The  amount  of  coal 
thus  bought  under  license  regulations  was  large,  the  nor- 
mal exportation  of  the  United  Kingdom  being  some  97 
million  tons,  about  one-third  of  the  entire  output.  Of 
the  amount  exported  during  the  war,  neutrals  had  been 
getting  2y  per  cent.  Upon  them  fell  the  brunt  of  the 
new  regulation  and  the  decrease  in  the  June  exportation 

face  work  about  the  mines  (2933  of  them  in  Scotland).  After  the 
beginning  of  the  war  the  number  of  women  employed  in  the  Scot- 
tish coal-fields  increased  but  the  Committee  could  not  indicate 
to  what  extent.  As  for  boys,  none  under  fourteen  might  be  em- 
ployed underground,  and  none  under  thirteen  for  more  than  54 
hours  a  week  or  10  hours  in  one  day. 
*  Cd.  7939. 


THE  COAL   MINES 


65 


compared  with  that  of  April  was  125,000  tons.^  Li- 
cences for  sending  coal  to  South  America,  Scandinavia, 
and  Spain  were  refused.  In  the  case  of  Spain  it  was  for 
a  time  felt  that  exportation  should  be  permitted,  since  the 
coal  was  used  in  working  mines  whence  iron  and  copper 
were  sent  to  Great  Britain.  But  of  late  there  had  been 
reason  to  believe  that  coal  reached  Germany  indirectly 
from  Spain.  The  restrictions  at  least  affected  favour- 
ably rates  for  France  and  Italy .^ 

The  second  Governmental  committee,  also  appointed 
early  in  the  spring  of  191 5,  was  instructed  to  concern 
itself  with  the  enhanced  price  of  coal,  to  discover  whether 
there  was  justification  for  this,  and  if  not  to  suggest 
remedies  for  it.  The  Committee  was  promised  by  Mr. 
Runciman,  President  of  the  Board  of  Trade,  in  response 
to  parliamentary  demand.  In  February,  Sir  A.  B.  Mark- 
ham,  supported  by  Messrs.  Rowntree  and  Bathurst,  had 
urged  that  the  Government  forbid  by  proclamation  the 
sale  of  coal  at  prices  exceeding  those  of  twelve  months 
before  the  war  by  more  than  from  one  to  two  shillings. 
Mr.  Runciman  replied  that  the  rise  in  price  was  peculiar 
to  London  and  would  be  modified  by  the  efforts  of  the 
Executive  Committee  of  the  Railways.*^ 

The  interpretation  put  by  workmen  upon  the  situation 
was  expressed  in  a  manifesto  of  May  2y,  191 5,  issued  by 
the  Management  Committee  of  the  General  Federation  of 

5W.    H.    Renwick,    The    Coal    Industry   under   War    Conditions, 
Nineteenth  Century  and  After,  August,  1915. 
6L.  T.,  Je.  9,  191 5,  p.  5. 
7  P.  D.  C,  1915,  LXIX,  1 189. 


. 


66 


WAR    TIME    CONTROL   OF   INDUSTRY 


THE   COAL   MINES 


67 


Trade  Unions.  With  the  warning  that  "a  fortnight 
hence  may  see  the  whole  of  Lancashire  in  the  throes  of  a 
gigantic  industrial  dispute,"  the  document  charges  the 
Government  with  ineffectively  handling  food  prices  and 
war  profits,  but  particularly  with  '*  the  failure  to  deal  with 
the  coal  question  when  the  conspiracy  to  increase  price  is 
so  obvious."  Not  only  do  high  prices  for  coal  endanger 
comfort  and  health,  it  is  added,  but  they  decrease  the  pos- 
sibilities of  employment,  since  some  manufacturers  talk 
of  shutting  down  factories.^ 

The  findings  of  the  Committee,  made  public  in  March, 
1915,^  tended  to  justify  both  the  contention  of  Mr. 
Runciman  and  that  of  the  unions.  It  appeared  that  dur- 
ing the  winter  of  1914-15  the  North  and  the  Midlands 
had  suffered  no  marked  rise  in  the  price  of  household 
coal.  On  the  other  hand,  the  Southern  counties  and  Lon- 
don (whence  came  most  of  the  Committee's  evidence) 
had  witnessed  an  advance  of  between  9  s.  and  14  s.  per  ton, 
according  to  quality.  Behind  this  might  lie  either  manip- 
ulation of  the  market  by  producers  and  dealers  or  such 
difficulties  of  traffic  as  would  curtail  the  supply  and  send 
up  the  price.  Examining  the  first  possibility,  the  Com- 
mittee did  not  discover  the  existence  of  rings  of  colliery 
owners  and  coal  merchants,  although  it  did  find  that  **  a 
few  leading  firms  decide  upon  increased  prices  which 
without  more  ado  become  the  public  prices  of  the  day  and 
are  advertised  next  day  in  che  newspapers."     In  London 

8L.  T.,  Je.  s,  191S,  p.  5. 
»  Cd.  7866. 


the  best  grades  of  household  coal  are  sold  under  a  sliding 
scale,  one-half  of  any  advance  in  the  retail  price  accruing 
to  the  colliery  owner,  one-half  to  the  dealer.  The  Com- 
mittee pronounced  the  system  indefensible,  but  did  not 
attempt  to  estimate  the  extent  of  its  responsibility  for  the 
increased  London  prices. 

Regarding  another  element  of  the  situation  the  Com- 
mittee was  more  specific.  This  was  the  hindrance  to 
transportation  arising  from  war  conditions.  The 
marked  shortage  of  empty  wagons  worked  less  to  the  dis- 
advantage of  districts  near  the  coal  fields  than  it  did  to 
London.  Supplies  of  coal  were  more  readily  furnished 
if  the  wagons  could  make  a  short  journey  and  return 
quickly.  In  as  much  as  London  was  rather  far  from  the 
mines,  3  s.  extra  was  not  improperly  charged  for  delivery 
there.  But  the  consumer  had  been  asked  for  much  more 
than  this.  Such  additional  demand  could  in  part  be 
explained  by  a  closer  scrutiny  of  conditions  of  traffic. 

In  normal  times  London  imports  annually  8,000,000 
tons  of  coal  by  sea  from  the  North,  paying  about  3  s.  per 
ton  for  carriage.  At  the  outbreak  of  the  war  the  Gov- 
ernment had  requisitioned  large  numbers  of  the  coal  boats, 
finding  them  exceptionally  useful,  and  had  not  replaced 
them.  Such  as  continued  to  ply  from  north  to  south 
found  the  sea  abounding  in  dangers  —  buoys  removed, 
lights  extinguished,  the  channel  covered  with  minefields 
—  and  with  proper  caution  extended  the  time  of  their 
voyage  threefold.  The  shortage  and  the  slowness  were 
reflected  in  an  advance  of  freights  to  as  much  as  13  s. 


68 


WAR   TIME    CONTROL   OF    INDUSTRY 


6d.   at  times,   7  s.   still   ruling  in   the  spring  of    1915. 

To  the  Committee  the  outlook  for  the  winter  of  191 5- 
16  seemed  serious.  Its  recommendations  were  twofold. 
The  Government  should  invite  the  London  County  Coun- 
cil and  other  public  bodies  to  buy  supplies  of  coal  and 
store  them  during  the  summer.  To  be  sure,  this  would 
enhance  the  summer  price  of  coal,  would  require  large 
capital  and  would  involve  difficulties  of  storage,  but  it 
would  be  in  the  public  interest.  Should  the  Government 
also  control  the  output  of  the  collieries  during  the  war? 
Despite  the  magnitude  of  the  undertaking  which  would 
involve  1,270,000  employes  and  an  output  of  287  mil- 
lion tons,  the  Committee  were  of  the  opinion  that  if 
prices  did  not  return  to  a  reasonable  level,  it  should  take 
steps  to  do  so.  Maximum  prices,  either  "  recom- 
mended "  or  fixed  by  the  Government,  it  did  not 
favour.  ^^ 

Soon  the  question  of  the  price  of  coal  came  up  in  the 
House  of  Commons.  Mr.  Runciman  was  urged  to  do 
something  bold  and  practical.  After  explaining  in  his 
reply,  as  the  Committee  had  done,  the  difficulty  of  trans- 
porting coal  to  London,  he  admitted  that  merchants  and 
producers  had  acted  unjustifiably.  With  the  former, 
who,  to  be  sure,  were  hampered  by  loss  of  horses  and  by 
the  general  disorganization,  he  had  held  several  con- 
ferences and  had  at  length  arranged  that  profits  should 
be  strictly  limited.  The  producers  were  less  tractable. 
They  urged  that  rising  wages  had  increased  their  costs 

10  Cd.  7866. 


i 


I 


K 


THE   COAL   MINES  69 

to  an  extent  which  they  professed  to  estimate  at  i  s.  6  d. 
per  ton,  a  figure  which  without  doubt  was  "  a  gross  ex- 
aggeration." The  actual  estimate  would  be  nearer  pence 
than  shillings  and  the  existing  pit-head  price  of  coal  was 
far  in  excess  of  what  expenses  would  justify.  This  dec- 
laration brought  from  the  Labour  members  cries  of 
"  Hear,  hear!  "  The  owners  of  the  collieries,  continued 
Mr.  Runciman,  urge  that  their  industry  is  speculative, 
making  good  the  losses  of  one  year  from  the  profits  of 
the  next.  To  this  plea  he  had  responded  that  the  current 
year  should  not  be  regarded  as  one  which  might  justify 
the  taking  of  compensatory  profits,  and  he  had  almost 
reached  an  agreement  with  Midland  owners.  He  hoped 
soon  to  announce  that  the  companies  had  come  a  litde 
nearer  to  what  was  expected,  he  might  say  demanded,  of 
them.  For  the  Government  and  Parliament  would  not 
tolerate  exploitation.^^ 

What  lay  behind  this  scarcely  veiled  threat  was  the 
Government's  determination  to  limit  the  price  of  coal  by 
statute  if  necessary,  a  departure  from  the  recommenda- 
tions of  its  Committee.  At  the  same  moment,  however, 
a  series  of  critical  events  deferred  for  a  time  such  action. 
To  the  parties  thus  far  active  —  the  Government,  the 
owners,  and  the  public  —  was  added  a  fourth  and  more 
determined  one,  the  miners. 

The  spring  of  19 15  saw  the  first  demand  for  war  bo- 
nuses. The  successful  agitation  of  the  railwaymen  in 
February  has  been  described.     By  the  end  of  May  986,000 

"  P.  D.  C,  1915,  LXXII,  403-419. 


f 


70 


WAR   TIME   CONTROL   OF   INDUSTRY 


THE   COAL   MINES 


working  people  of  one  sort  or  another  had  received  war 
advances,  from  ten  to  twelve  millions  had  not.^^  It  was 
during  this  same  month  of  May  that  the  miners  got  their 
first  bonus.  In  April  they  had  asked  for  a  20  per  cent, 
increase  in  their  earnings,  to  which  the  coal  owners  had 
responded  by  an  offer  of  10  per  cent.  Further  advance, 
however,  the  owners  would  consider  if  in  any  case  it 
were  recommended  by  a  local  wages  board.  In  this  pro- 
viso lay  embedded  a  principle,  clearly  gasped  by  the  con- 
tending parties.  The  coal  owners  objected  strongly  to 
setting  aside  machinery  established  for  dealing  locally 
with  disputes.  Different  economic  conditions  relative  to 
the  export  and  the  home  trade,  they  contended,  made 
uniform  treatment  of  the  wages  problem  impossible. 
The  Miners'  Federation,  on  the  other  hand,  demanded 
that  wages  be  settled  on  a  national  basis.  The  increased 
cost  of  living  was  national,  not  local.  Why  should  not 
the  antidote  be  equally  national,  or  in  other  words,  why 
should  not  the  increase  be  uniform?  ^^  Mr.  Asquith  was 
on  May  i  invited  to  act  as  arbitrator  and  his  award  in- 
clined toward  the  view  of  the  coal  owners.  Although  a 
case  had  been  made  out  for  an  immediate  advance  of 
wages,  the  extent  of  this,  he  ruled,  should  be  determined 
by  district  boards  and  committees.^^  Thus  the  first  war 
bonus  for  coal  miners  varied  from  10  per  cent,  to 
20  per  cent,  according  to  local  conditions. 

12  L.  T.,  Je.  s,  1915,  p.  5. 

13  Ibid.,  May  4,  p.  10. 
i*A.  R.,  1915,  p.  141- 


71 


Meanwhile  the  storm  gathered  in  another  quarter.     On 
April  I  the  miners  of  South  Wales  seized  the  war  time 
opportunity  to  hand  in  notices  terminating  on  June  30  the 
existing  five-year  agreement  regarding  wages  in  that  dis- 
trict.    Their   new    demands   were   far   reaching.     They 
asked  for  a  three-year  agreement  co-terminous  with  one 
already  current  in  the  Midlands.     Specifically  they  asked 
that  the  minimum  rate  should  be  higher  than  was  the 
maximum  rate  under  the  expiring  arrangements;  that 
there  should  no  longer  be  a  maximum  rate;  that  the 
standard  rates  of  1879  ^^^  ^^77  should  be  raised  by  50 
per  cent,  and  35  per  cent,  respectively;  that  all  men  em- 
ployed on  afternoon  and  night  shifts  be  paid  at  the  rate 
of  six  turns  for  five  worked ;  and  that  every  adult  surface- 
man be  paid  not  less  than  5  s.  6  d.  a  day.     At  two  special 
meetings  of  the  Conciliation  Board,  representatives  of  the 
employers  heard  the  men's  arguments  but  refused  their 
demands.     Negotiations  were  for  the  time  broken  off.^^ 
On  June  9  the  men  proposed  among  other  things  that 
there  be  a  joint  audit  of  the  selling  price  of  coal  for  each 
month  from  July,  1914,  to  May,  1915.     Instead  of  this 
the   South  Wales  Coal-owners'  Association  two  weeks 
later  issued  its  own  audit,  based  on  the  business  of  79 
firms.     Of  the  total  output  of  these  firms    (33,983,829 
tons)  19.8  per  cent,  was  produced  either  at  a  loss  or  with- 
out profit,  49.4  per  cent,  at  a  profit  of  less  than  i  s.  per 
ton,  only  15.4  per  cent,  at  a  profit  of  2  s.  6  d.  per  ton.^^ 

"  L.  T.,  Je.  10,  p.  5. 

"Ibid.,  Je.  II,  p.  10;  Je.  28,  p.  3;  P.  D.  C,  1915,  LXXII,  443-448. 


Ml 


72 


WAR   TIME   CONTROL   OF   INDUSTRY 


THE   COAL   MINES 


73 


'!i| 


To  such  modest  returns  the  owners  could  refer  and  could 
point  out  too  that  they  were  now  obliged  to  give  to  all 
colliery  workers  a  war  bonus  of  17^^  per  cent,  the  equiv- 
alent of  I  s.  per  ton.  They  felt  strongly  the  unwisdom 
of  entering  during  such  critical  times  into  a  three  years* 
agreement.  At  the  cessation  of  hostilities  the  condition 
of  the  coal  trade  was  likely  to  be  serious.  The  British 
Admiralty  was  at  the  moment  an  extensive  buyer  in 
South  Wales  and  had  accumulated  large  stocks.  On  the 
conclusion  of  peace  it  would  no  longer  buy  but  would 
sell  in  order  to  set  tonnage  free.^^  This  situation  the 
miners  also  foresaw  and  made  it  a  ground  for  their  three- 
year  demands.  Since  their  wages  varied  with  the  sell- 
ing price  of  coal,  how  could  they  hope  without  an  agree- 
ment of  some  duration  to  maintain  their  present  in- 
come? ^^  Thus  the  future  as  well  as  the  present  fur- 
nished grounds  for  the  approaching  conflict. 

By  the  end  of  June  the  owners  had  placed  their  case  in 
the  hands  of  the  Government,  having  held  long  consulta- 
tions with  Mr.  Runciman,  President  of  the  Board  of 
Trade,  and  with  Sir  George  Askwith,  a  permanent  of- 
ficial of  the  Board.^^  Mr.  Runciman,  in  consequence, 
placed  before  the  miners  various  modifications  of  their 
proposals.  It  was  in  vain.  On  July  12  delegates  of  the 
South  Wales  Miners'  Lodges  in  conference  at  Cardiff 
summarily  rejected  them,  refused  anything  short  of  their 

"General  Meeting  of  the  Ebbw  Vale  Steel,  Iron,  and  Coal  Co., 
Je.  29,  1915  (L.  T.,  Je.  20,  p.  15). 
18  L.  T.,  Jy.  16,  1915,  p.  9. 
i»  Ibid.,  Je.  30,  p.  15. 


original  demands,  and  resolved  to  stop  the  collieries  on 
July  15  if  the  concessions  were  not  granted.^*^ 

The  Government,  rebuffed  as  a  conciliator,  determined 
to  use  its  strong  arm.  Within  a  fortnight  it  had  achieved 
a  triumph  in  the  labour  world  and  in  the  House  of  Com- 
mons by  the  passage  of  the  Munitions  of  War  Act.^^ 
One  of  the  significant  features  of  this  was  its  provision 
that  all  industrial  disputes  involving  the  safety  of  the 
realm  during  the  war  should  be  subject  to  compulsory 
arbitration.  Failure  to  submit  to  such  arbitration  was 
an  offence  against  the  state  punishable  with  a  fine  of  £5 
for  each  day  or  part  of  day  during  which  work  might  be 
suspended.  The  provision  was,  however,  by  agreement 
clearly  applicable  only  to  certain  trades  which  had  ac- 
cepted it.  To  this  agreement  the  miners  were  not  a  party, 
and  the  Minister  of  Munitions,  Mr.  Lloyd  George,  was 
at  the  moment  when  the  South  Wales  dispute  arose,  en- 
deavouring to  have  them  and  the  cotton  operatives  come 
under  the  Munitions  of  War  Act.  In  his  interview  with 
the  Executive  Committee  of  the  Miners'  Federation  of 
Great  Britain,  this  body  had  shown  itself  unwilling,  as 
always,  to  accept  compulsory  arbitration.  Assurances  it 
would  give  that  everything  possible  would  be  voluntarily 
done  to  avoid  strikes.  Mr.  Lloyd  George,  in  turn,  while 
saying  that  he  strongly  wished  the  miners  to  come  into 
his  scheme,  explained  that  he  would  take  no  steps  to  force 
them  into  it.^^     To  this  stage  the  negotiations  had  come 

20  Ibid.,  Jy.  13,  p.  6. 

21  Cf.,  above  pp.  30,  31. 

22  L.  T.,  Je.  26,  1915,  p.  5;  Jc.  30,  p.  IS. 


74 


WAR    TIME    CONTROL   OF    INDUSTRY 


THE    COAL    MINES 


75 


in 


at  the  end  of  June,  when  they  were  suspended  during 
the  settlement  of  the  South  Wales  dispute.  Indeed,  ar- 
rangements were  at  the  moment  in  progress  for  holding  a 
great  meeting  at  London  during  the  first  fortnight  of 
July.  At  this  gathering,  delegates,  representing  miners 
and  mine-owners  from  every  district  in  England,  were  to 
consider  the  recommendations  of  the  Home  Office  Com- 
mittee on  Coal  Supplies,  and  enthusiasm  for  co-operative 
action  in  increasing  the  output  was  expected. ^^ 

In  view  of  the  Welsh  miners'  threat  of  July  12  to  stop 
the  collieries  on  July  15  if  their  terms  were  not  granted, 
Mr.  Runciman  announced  in  the  House  of  Commons  on 
the  13th  that  the  Government  would  apply  to  them  by 
proclamation  the  Munitions  of  War  Act.  The  dispute 
had  now  become  prejudicial  to  the  manufacture,  trans- 
port, and  supply  of  munitions  of  war.  So  far  as  an 
amendment  had  excluded  the  miners  from  the  operation 
of  the  Act,  it  had  made  the  exclusion  dependent  upon 
their  possessing,  in  the  opinion  of  the  Minister  of  Muni- 
tions, other  means  for  the  settlement  of  disputes.  The 
announcement  of  the  President  of  the  Board  of  Trade 
was  received  with  cheers,  the  Labour  benches  offering  no 
opposition  but  only  requesting  that  the  decision  be  made 
known  at  once  to  the  men  in  the  coalfield.  So  certain 
was  the  Government  that  a  strike  would  be  avoided  that 
it  did  not  set  up  a  South  Whales  Munitions  Tribunal  to 
deal  with  violations  of  the  Act.  It  relied  rather  upon  the 
Executive   Committee   of   the   Miners'   Federation,    for 


this  body  had  given  a  pledge  to  Mr.  Lloyd  George  and 
Mr.  Arthur  Henderson  that  there  should  be  no  strike 
in  the  coalfields  during  the  war.  Moreover,  the  Parlia- 
mentary Committee  of  the  Trade  Union  Congress  was 
to  meet  on  the  morrow  and  it  was  expected  that  or- 
ganized labour  would  put  forth  every  effort.^^ 

So  far  as  the  responsible  leaders  of  the  miners  were 
concerned,  the  Government  had  made  no  miscalculation. 
On  July  14  the  Executive  Committee  of  the  South  Wales 
Miners'  Federation  reported  that  they  had  advised  the 
men  to  go  to  work  on  day-to-day  contracts  until  a  settle- 
ment was  reached.     They  therefore  requested  Mr.  Runci- 
man to  resume  negotiations.     What  had  not  been  cor- 
rectly appreciated  in  London,  however,  was  the  temper 
of  Cardiff.     There  neither  the  intimidation  of  the  Gov- 
ernment nor  the  reasonableness  of  their  own  Executive 
Committee  impressed  the  men.     By  a  vote  of  180  to  113 
the  Conference  of  South  Wales  Delegates  decided  to  re- 
ject their  Executive's  recommendation  that  there  be  no 
stoppage  of  work,  and  thereby  they  committed  themselves 
to  the  strike.     This  legislative  body  had  drifted  away 
from  its  eminent  leaders  and  had  come  under  the  influence 
of  sub-leaders  and  district  agents,  several  of  them  apostles 
of   Syndicalism  and  eager  to  take  any  opportunity  to 
force  the  Government  to  nationalize  the  mines.     It  is 
possible  that  a  ballot  of  the  coalfield  would  not  have 
approved  its  decision.     However  that  be,   on  July   15 
200,000  miners  ceased  work.^^ 


28  Ibid.,  Je.  26,  p.  5. 


2*  Ibid.,  Jy.  14,  p.  8;  P.  D.  C,  LXXIII,  739,  740. 
25  L.  T.,  Jy.  15,  1915,  p.  7;  Jy.  16,  p.  9. 


nl 


76 


WAR   TIME   CONTROL   OF   INDUSTRY 


■  J«  I 


m 


4 


%\ 


The  Minister  of  Munitions  at  once  set  up  a  General 
Munitions  Tribunal  for  Wales  and  Monmouthshire. 
The  men  felt,  however,  that  the  Government  could  not 
enforce  the  Act  and  they  were  angered  by  the  Procla- 
mation extending  its  provisions  to  them.  This  feeling 
made  it  more  difficult  for  the  Executive  Committee,  al- 
ready repudiated,  to  negotiate  to  any  advantage.  For 
a  time  the  Committee  was  hopeful  of  limiting  the  strike 
to  twenty-four  hours,  but  its  conference  on  the  i6th 
with  Mr.  Runciman  was  barren  of  result.  Nor  would 
the  President  of  the  Board  of  Trade  summon  the  newly 
accepted  leaders  of  the  miners  to  London.  The  dead- 
lock continued  until  on  the  19th  Mr.  Runciman,  Mr. 
Lloyd  George,  and  Mr.  Arthur  Henderson  went  to 
Cardiff.  Next  day  Mr.  Lloyd  George's  personal  appeal 
to  his  fellow  countrymen  availed  as  nothing  else  had 
done.2^  The  week's  strike  was  ended  not  through  the 
operation  of  the  Munitions  of  War  Act  nor  the  leader- 
ship of  the  Executive  Committee,  but  through  the  per- 
suasiveness of  the  Minister  of  Munitions  and  the  grant 
of  concessions  not  unlike  those  demanded  from  the  first. 
Until  six  months  after  the  close  of  the  war,  and  longer, 
unless  three  months  notice  be  given,  a  new  standard,  50 
per  cent,  above  the  old  standard  of  1879,  was  to  be  set 
up;  and  this  new  standard  plus  10  per  cent,  should  serve 
as  a  minimum  for  wages.  No  rise  in  wages  could,  how- 
ever, take  place  until  a  selling  price  corresponding  with 
the  new  minimum  should  be  decided.     Henceforth  there 

26  Ibid.,  Jy.  15,  1915,  p.  7;  Jy-  16,  p.  9;  Jy-  17.  p.  6;  Jy.  21,  p.  7. 


THE    COAL    MINES 


77 


was  to  be,  as  the  men  wished,  no  maximum  wage.  Men 
employed  on  afternoon  and  night  shifts  were  to  be  paid 
at  the  rate  of  six  turns  for  five  —  precisely  the  miners' 
demand.  Surfacemen  receiving  less  than  3  s.  4  d.  a  day 
were  to  have  that  sum,  which,  however,  was  less  than  had 
been  asked  for.  No  one  was  to  be  penalized  for  the 
present  dispute  and  every  effort  was  to  be  made  by  all  con- 
cerned to  maintain  and  increase  the  output  of  coal.  The 
cost  of  the  strike  was  estimated  as  about  £1,500,000,  the 
falling  off  in  coal  mined  at  about  1,000,000  tons.^*^  The 
Munitions  Act  had  proved  inapplicable  to  men  who  had 
not  agreed  to  its  provisions,  and  responsible  labour  lead- 
ers had  been  repudiated  by  their  supporters.  There  was 
much  that  was  ominous  for  constituted  authority  in  the 
history  of  the  South  Wales  coal  strike,  only  the  abilities 
of  Mr.  Lloyd  George  showing  the  brighter  for  it. 

After  this  disconcerting  fortnight  the  Government  re- 
turned to  its  legislation  regarding  the  price  of  coal.  Mr. 
Runciman  had  introduced  a  Price  of  Coal  (Limitation) 
Bill  which  on  July  19  came  up  for  second  reading.  Its 
chief  provision  was  that  coal  at  the  pit's  mouth  should  not 
be  sold  at  prices  exceeding  by  4  s.  per  ton  the  prices  which 
obtained  there  at  corresponding  dates  in  the  tw^elve 
months  preceding  June  30,  19 14.  The  Board  of  Trade 
might  in  special  circumstances  increase  the  4  s.  The  fine 
for  violation  of  this  provision  should  not  exceed  £100, 
or  three  times  the  amount  which  the  seller  might  have 
received  in  excess  of  the  maximum.^^     To  the  criticism 

27  Ibid.,  Jy.  21,  p.  7;  Jy-  22,  p.  7. 

"Ibid.,  Jy.  15,  p.  8;  P.  D.  C,  191S,  LXXIII,  1674. 


78 


WAR    TIME    CONTROL    OF    INDUSTRY 


that  the  bill  penalized  one  great  industry  while  allowing 
to  others  high  war  profits,  Mr.  Runciman  replied  that 
without  it  coal  producers  would  have  the  market  at  their 
mercy.     As  for  other  industries,  the  excess  profits  tax 
would   be  heavy.     Only  with  reluctance,  however,   did 
the  House  accept  the  principle  of  the  bill,  looking  upon 
the  measure  as  one  of  expediency.     At  the  committee 
stage  debate  arose  over  an  amendment  to  include  within 
its  provisions  contracts  of  the  summer  made  before  its 
passage.     June  was  the  usual  month  for  such  transactions 
and  the  contractors  who  had  bought  then  would,  if  not 
protected,  be  undersold  to  the  extent  of  3  s.  by  merchants 
who  might  buy  in  August.     Mr.  Runciman,  opposing  the 
amendment,  declared  that  it  struck  at  the  root  of  all 
commercial  stability.     It  was  unfortunate,  he  admitted, 
that  the  bill  had  been  delayed,  but  labour  troubles  in  the 
coalfields  were  responsible  for  this.     When  the  amend- 
ment was  at  length  withdrawn,  he  accepted  another,  pro- 
viding that,  if  contract  prices  had  been  above  those  fixed 
by  the  bill,  the  contnact  should  not  be  invalid  but  should 
be  subject  to  a  reduction  in  the  purchase  price. 

Another  amendment  was  concerned  with  retail  prices 
in  London,  limiting  them  to  a  15  s.  advance  upon  the 
prices  at  the  pit-head  as  fixed  by  the  bill.  On  Mr.  Runci- 
man's  declaring  that  an  attempt  to  fix  a  flat  rate  would 
be  a  disastrous  failure,  this  too  was  withdrawn.  He  had 
already  explained  that  London  coal  merchants  were  un- 
dertaking not  to  increase  the  price  beyond  a  certain  num- 
ber of  shillings  during  the  summer,  and  were  prepared 


THE    COAL    MINES 


79 


to  give  a  similar  undertaking  for  the  coming  winter. 
He  now  added  that  to  protect  the  poor  from  hawkers  two 
hundred  of  the  largest  coal  merchants  in  London  would 
open  depots  where  coal  might  be  bought  in  small  quan- 
tities at  the  price  of  the  day.^^  The  bill  was  passed  by 
the  House  at  the  end  of  July  and  a  month  later  the  Board 
of  Trade  in  a  circular  to  the  London  coal  merchants  urged 
them  to  increase  at  once  their  stocks  to  the  maximum. 
Thus  the  pits  could  be  kept  fully  at  work  and  demands 
upon  transportation  would  later  be  reduced.  H  house- 
holders would  store  what  they  could,  consumers  without 
facilities  could  be  supplied  more  easily  in  the  winter.^^ 
Such  were  the  preparations  made  by  the  Government 
in  the  summer  of  19 15  for  avoiding  another  winter  of 
high  prices,  especially  in  London.  It  had  embarked 
upon  a  career  of  price-fixing  in  the  trade,  and  the  follow- 
ing year  it  was  carried  further  by  the  current.  Although 
the  Price  of  Coal  Act  in  large  measure  protected  home 
consumers,  no  limit  had  been  set  to  prices  which  might 
be  asked  of  foreign  buyers.  The  Government's  policy 
was  to  provide  for  home  needs  first,  for  those  of  the 
Allies  next,  for  those  of  neutrals  last.  Licenses  to  ex- 
port coal  to  the  Allies  were  for  the  most  part  easily  pro- 
curable, but  until  May,  19 16,  the  price  at  which  coal  was 
sold  them  was  very  high.  South  Wales  at  times  sold 
abroad  low  grade  coals  for  50  s.  to  55s.,  although  the 
Government  by  arrangement  was  buying  better  grades  at 

29  p.  D.  C,  1915,  LXXIII,  2186,  2187. 
80  B.  T.  J.,  Sept.  2,  1915,  p.  669. 


8o  WAR    TIME    CONTROL   OF    INDUSTRY 

less  than  one-half  this  amount.  The  colHeries  which  pro- 
duced the  lower  grades  available  for  export  reaped  the 
highest  profits,  but  all  collieries  realized  on  small  coals, 
the  price  of  which  at  times  was  los.  per  ton  more  thaii 
the  authorities  were  paying  for  large  coals.  Early  in 
1916  such  heavy  shipments  of  smalls  were  going  to 
France  that  in  view  of  the  home  shortage  licenses  were 
for  a  time  held  up.^^ 

Against  conditions  in  the  export  trade  France  and 
Italy  protested.  Not  only  were  the  prices  for  coal  very 
high  but  freights  had  l^ecome  exorbitant.  Rates  to 
French  and  Italian  ports  compared  with  those  of  1914 
were  as  follows :  ^^ 

Marseilles T''  ^.     1?^'"^)  ^^'     8/.  d. 

Marseilles  85s.  6d.    (May)  lof    72     c 

Bordeaux    7^  f  rMarrh^  Vi'    \t 

Rouen  '      ^   ^j    uviarcn;  7  f .    30      c. 

^"    41S.  6d.  (May)  6s.     3^4  d. 

In  May,  1916,  the  Board  of  Trade  put  the  needs  of 
France  before  coal  owners  and  shippers.  The  interests 
concerned  co-operated  cordially  and  scales  of  maximum 
coal  prices  and  maximum  freights  were  drawn  up  to  be 
effective  June  i.  Henceforth  all  orders  from  France  for 
coal  were  to  pass  through  one  central  office  in  Paris  and 
were  to  be  forwarded  ultimately  to  the  District  Coal  and 
Coke  Committees  in  the  various  parts  of  the  United 
Kmgdom.  The  Committees  in  turn  undertook  distribu- 
tion of  the  orders,  supervision  of  their  execution,  and 

31  Iron  and  Coal  Trades  Review  account  of  1916  •  L   E    Feb    17 
191 7,  p.  329.  '  »         •    /» 

32  Ibid. 


THE    COAL    MINES 


81 


arranging  for  shipments.  Exporters  saw  their  profits 
decrease  but  France  was  able  to  supply  her  furnaces  and 
keep  warm  her  homes  at  reasonable  cost.  Five  months 
later  the  arrangements  were  extended  to  Italy,  corres- 
ponding schedules  being  drawn  up.^^ 

The  passage  of  the  Price  of  Coal  (Limitation)  Act  in 
1915  and  the  setdement  of  the  South  Wales  strike  did 
not,  as  it  turned  out,  establish  permanendy  either  the 
price  of  coal  for  home  use  or  the  wages  to  be  paid  the 
miners.     Since  the  supply  of  coal  never  kept  pace  with  the 
demand  for  it,  the  Act  did  undoubtedly  prevent  abnor- 
mal prices.     What  might  have  happened  is  indicated  by 
the  course  of  the  export  trade.     But  it  was  felt  in  some 
quarters  that  the  maximum  fixed  by  the  Act  was  too 
high,  that  the  exclusion  of  contract  coal  from  its  pro- 
visions enhanced  prices,  and  that  middlemen  were  still 
free  to  increase  their  profits.^^    The  probability  that  mid- 
dlemen were  suffering  litde  was  supported  by  reports  like 
that  of  Messrs.  Lambert  Brothers,  coal  merchants,  coal 
exporters,  and  shipowners  in  London  and  Cardiff.     In 
the  year   1914-15  they  were  able  to  distribute  a  divi- 
dend of  20  per  cent,  free  of  tax  and  in  1915-16  one  of 
25  per  cent.     Since  each  year  they  put  by  a  reserve  equal 
to  the  dividends,  the  net  profits  during  two  years  were 
90  per  cent.^^ 

83  B.  T  J.,  May  15,  1916,  p.  530;  Je.  i,  p.  586;  Oct.  26,  p.  267. 

3*M.  G.,  Sept.  30,  1916,  p.  10  (editorial). 

35  M.  G.,  Sept.  30,  191 6,  p.  10.  The  net  profits  of  this  firm  for  a 
series  of  years  were  as  follows:  1909-10,  £39,000;  1910-11,  £40,000; 
1911-12,  £60,245;  1912-13,  £106,476;  1913-14,  £84,557;  1914-15, 
£142,548;  1915-16,  £180,246. 


82 


WAR    TIME    CONTROL   OF    INDUSTRY 


II 


In  July,  19 16,  the  inland  prices  allowed  by  the  Board  of 
Trade  to  the  South  Wales  owners  were  further  advanced 
2  s.  6d.,^^  a  concession  which  seemed  to  some  unwar- 
ranted.^^    The  miners   were  displeased   and,   although 
their  wages  had  been  increased  15  per  cent,  in  June,  they 
demanded  in  November  a  new  advance  under  threat  of 
strike.^^     The  Government,    feeling  that  the  output  of 
coal  should  no  longer  be  thus  endangered,  took  an  im- 
portant and  decisive  step.     As  from  December  i,  19 16, 
it  took  possession  of  the   South  Wales  mines.     Other 
motives  than  a  desire  to  control  the  labour  situation  con- 
duced  to  this   action.     Lord   Milner   had   already  pro- 
posed that  the  mines  be  taken  over  as  the  railways  had 
been.     Neutral  trade  could  the  better  be  directed,  since 
neutral  ships  stopping  for  British  coal  could  be  required 
to  call  on  their  return  at  specified  ports.^^     It  was  further 
pointed  out  that  fixing  the  price  at  the  pit-mouth  was  not 
proving    efficacious    in    protecting    the    consumer.     To 
achieve  this  the  wholesale  and  retail  trade  ought  also 
to  be  under  state  control.^^ 

The  Government  embodied  its  newly  taken  resolution 
in  a  regulation  added  to  the  Defence  of  the  Realm  Act. 
This  provided  that  any  designated  coal  mines  might  pass 
into  the  possession  of  the  Board  of  Trade  and  that  the 
owners  should  thenceforth  comply  with  the  directions  of 

8«  L.  E.,  Feb.  17,  1917. 
"  M.  G.,  Sept.  19,  1916  (editorial). 
'8L.  T.,  Dec.  I,  1916,  pp.  g,   10. 
38  M.  G.,  Sept.  18,  1916,  p.  4. 
*oibid.,  Sept.  19,  Dec.  20  (editorials). 


THE    COAL    MINES 


83 


the  Board  as  to  the  management  and  use  of  their  mines."* ^ 
The  Board  at  once  appointed  an  Interdepartmental  Com- 
mittee, representing  the  Board  of  Trade,  the  Home  Of- 
fice, and  the  Admiralty,  to  advise  with  regard  to  ad- 
ministration, and  to  deal  with  outstanding  questions  as 
to  the  general  rate  of  wages  in  the  South  Wales  coal- 
field. Within  a  month  it  was  decided  to  increase  wages 
there  by  another  15  per  cent.^^ 

On  December  19,  19 16,  Mr.  Lloyd  George,  explaining 
the  policy  of  the  new  Government,  declared  that  state 
control  would  be  extended  to  the  entire  mining  industry. 
English  and  Scottish  as  well  as  Welsh  miners  favoured 
this  extension,  and  were  confirmed  in  their  attitude  after 
the  premier  assured  a  deputation  from  the  Miners*  Federa- 
tion that  the  measures  contemplated  would  not  be  to  the 
disadvantage  of  the  workmen.  By  an  Order  in  Council, 
February  22,  19 17,  the  Government  took  possession  of 
the  remaining  coal  mines  of  the  United  Kingdom  as  from 
March  i,  1917.  A  new  department  was  set  up  by  the 
Board  of  Trade  to  administer  the  vast  business,  and  Mr. 
Guy  Calthrop  became  Controller  of  Coal  Mines.*^ 

Immediately  the  new  Controller  undertook  an  investi- 
gation of  the  elements  which  entered  into  the  market 
price  of  coal.  There  came  to  his  notice  instances  of 
colliery  companies  charging  London  merchants  prices 
which  exceeded  the  limits  prescribed  by  the  Price  of  Coal 
Act.     The  intervention  of   factors,  too,  enhanced  the 

*i  Regulation  of  Nov.  29,  1916,  D.  R.  M. 

*2  B.  T.  J.,  Dec.  7,  1916,  p.  717;  L  T.,  Jan.  19,  1917. 

♦8L.  T.,  Feb.  15,  1917;  B.  T.  J.,  Mar.  i,  1917,  p.  <5o8. 


!l 


84 


WAR    TIME    CONTROL   OF    INDUSTRY 


THE    COAL    MINES 


85 


price.  For  these  reasons  many  small  merchants  had  had 
trouble  in  selling  to  the  public  at  prices  agreed  upon. 
The  Controller,  therefore,  at  the  beginning  of  April  is- 
sued a  notice  requiring  colliery  companies  to  bring  their 
prices  into  accord  with  the  Price  of  Coal  Act.  Factors 
were  instructed  to  revise  their  charges  so  that  these  in 
no  case  should  exceed  a  provisional  maximum  of  i  s. 
6  d.  per  ton  between  colliery  and  distributor,  no  matter 
through  how  many  factors'  hands  the  coal  might  pass. 
Pending  further  investigation,  arrangements  were  made 
for  a  reduction  of  i  s.  per  ton  in  the  prices  advertised 
to  the  London  public.^^ 

In  September  the  Controller  took  advantage  of  the 
introduction  of  the  Coal  Transport  Reorganization 
scheme  '*^  to  cancel  all  contracts  for  coal  for  inland  con- 
sumption and  to  review  colliery  companies'  and  wholesale 
merchants'  prices.  Relative  to  the  latter  the  Wholesale 
Coal  Prices  Order  of  September  5  was  issued,  specify- 
ing the  maximum  profit  which  factors  and  wholesale  mer- 
chants would  henceforth  be  allowed.  To  the  pit-prices 
and  transportation  costs  they  might  add  3  d.  per  ton  for 
coal  to  be  used  fOr  locomotives ;  6  d.  for  that  needed  for 
other  railway  purposes  or  in  national  factories;  9  d.  for 
that  consumed  in  making  gas  and  electric  supplies  in 
Great  Britain ;  i  s.  for  that  sold  to  retail  merchants  in 
Great  Britain  for  resale  by  them  from  depot  or  wharf  or 
railway  siding  to  consumers  or  to  hawkers  and  small 

4*  B.  T.  J.,  Apr.  5,  1917,  p.  14. 
*^  Cf.,  above  p.  12. 


I 


I 


F 


dealers ;  i  s.  3  d.  for  all  other  coal,  including  that  sold  for 
consumption  in  Ireland,  except  that  2  s.  might  be  charged 
if  the  quantity  was  less  than  thirty  tons  and  was  sold 
from  railway  wagons  to  a  consumer  who  had  no  rail 
or  wharf  accommodations  but  did  provide  cartage."*^  In 
general  the  provisional  maximum  of  i  s.  6  d.  set  in  the 
spring  had  proved  sufficient. 

As  to  maximum  retail  prices,  no  uniform  schedule 
could  be  constructed.  In  different  localities,  colliery 
prices,  transportation  charges,  local  merchants'  cost  of 
distribution,  all  varied.  Maximum  retail  prices  should, 
therefore,  it  was  ordered,  be  fixed  by  local  authorities  — 
in  England  and  Wales  by  borough,  urban  district,  and 
rural  district  councils,  in  Scotland  by  county  and  town 
councils,  in  Ireland  by  urban  district  councils,  town  com- 
missioners, and  rural  district  councils.  Retailers'  net 
profits  were  prescribed  as  those  of  wholesalers  had  been. 
The  profit  for  selling  coal  delivered  by  a  road  vehicle 
from  depot,  wharf,  or  si  Jng  in  lots  of  one  ton  or  more 
should  not  exceed  i  s.  a  ton,  and  if  delivered  at  dealers' 
shops  under  certain  circumstances  should  be  6  d.  less  than 
this  charge;  if  the  lot  were  less  than  one  ton,  the  profit 
should  not  be  at  a  rate  of  more  than  2  s.  a  ton.  A 
general  rule  for  the  guidance  of  local  authorities  was 
formulated.  Investigation  had  shown  that  retail  prices 
ought  not  to  exceed  those  prevailing  in  the  twelve  months 
prior  to  the  war  by  more  than  7  s.  6  d.  a  ton,  or  6  s.  6  d. 
if  the  district  be  near  a  colliery.     If  increases  in  price 

"L.  T.,  Sept.  8,  191 7,  p.  8. 


86 


WAR   TIME   CONTROL   OF    INDUSTRY 


did  not  exceed  these  limits,  nothing  should  be  done.     If 
they  did,  the  circumstances  should  be  reported.^ ^ 

From  prescribing  the  profits  of  wholesalers  and  re- 
tailers, the  Government  turned  to  the  mineowners  and 
the  miners.     To  the  South  Wales  owners  it  proposed 
that  their  profits  should  be  those  of  19 13,  as  were  the 
profits   of  the  railway  companies;  but  the  owners  de- 
murred and  pointed  to  their  payment  of  super-taxes  and 
their  subscriptions  to  the  war  loans.'*^     At  the  annual 
July  meeting  of  the  shareholders  of  the  Ebbw  Vale  Steel 
Iron  and   Coal  Co.    (Limited),  a  meeting  at  which  a 
dividend  of  15  per  cent,  less  income  tax  was  announced 
on  the  ordinary  shares,  one  of  the  directors  declared  that 
the  coal  trade  more  than  any  other  had  "  unhappily  come 
under  the  blighting  influence  of  governmental  control." 
The  Coal  Controller  had  invited  representatives  of  the 
various  coalfields  to  meet  him  but  deliberations  had  been 
held  with  all  the  secrecy  of  a  Star  Chamber,  with  all  the 
ferocity  of  a  Council  of  Ten.     Recently  he  had  sent  to 
the   chairman   of   each   coal   company   the   outline   of  a 
scheme  under  which  95  per  cent,  of  the  excess  profits  of 
the  coal  trade  would  be  taken  either  by  himself  or  by  the 
Government.     The  speaker  explained  the  trade's  reliance 
upon  "  boom  years."     During  the  past  twenty  years  he 
knew  of  no  South  Wales  colliery  of  any  standing  which 
had  "  been  able  to  pay  a  dividend  of  not  less  than  10  per 
cent,   per  annum,"  i.e.,  return  to  shareholders   i  s.  per 

*'^  Ibid.,  Sept.  13,  p.  8. 
*8L.  T.,  Feb.  16,  1917. 


THE   COAL   MINES 


87 


ton  on  the  output.  *'  Which  goes  to  show  how  unfair 
it  is  to  single  out  a  particular  trade  for  harsh  treat- 
ment." ^» 

As  the  speaker  said,  a  Committee  of  the  Mining  As- 
sociation of  Great  Britain  had  entered  into  negotiations 
with  the  Controller.  Before  an  agreement  was  an- 
nounced, however,  certain  owners,  feeling  that  the  Com- 
mittee was  going  too  far,  took  obstructive  measures. 
Asking  counsel's  opinion  on  the  question  whether  the 
Government  had  power  to  take  over  the  mines  without 
Act  of  Parliament,  they  were  advised  that  it  had  not. 
Though  contrary  counsel  could  be  quoted,  the  Govern- 
ment decided  to  proceed  by  statute.  The  autumn  par- 
liament was,  accordingly,  asked  to  pass  a  bill  legalizing 
the  Government's  action  and  sanctioning  the  agreement 
which  had  practically  been  reached  on  July  20th  between 
the  Controller  and  the  Committee.  By  this  Coal  Mines 
Control  Agreement  (Combination)  Bill  every  mine- 
owner  acquires  the  right  to  make  a  claim  upon  the  Coal 
Controller,  if  during  any  accounting  period  his  profits 
are  less  than  they  were  during  the  standard  period.  If, 
for  example,  a  colliery  with  an  output  of  10,000  tons 
during  a  standard  or  pre-war  period  declines  in  output  to 
9,000  tons  during  an  accounting  period  of  the  same 
length,  the  owner  becomes  entitled  to  a  profit  on  the  basis 
of  9,250  tons.  If,  on  the  other  hand,  an  owner's  profits 
during  the  accounting  period  are  in  excess  of  his  profits 
during  the  standard  period,  he  is  allowed  to  retain  one- 

*»Ibid.,  Jy.  26,  p.  II. 


I  ri  I 


III 


i 


88 


WAR    TIME   CONTROL   OF   INDUSTRY 


fourth  of  the  20  per  cent,  of  excess  profits  to  which  the 
Finance  Act  entitles  him.  The  remaining  15  per  cent,  of 
excess  profits  goes  to  the  creation  of  a  fund  to  meet  the 
payments  due  to  owners  whose  profits  have  fallen  off. 
If  the  fund  should  prove  inadequate,  Parliament  will  be 
asked  to  make  good  the  deficiency.  Although  many  mine- 
owners  demurred  at  the  surrender  of  the  15  per  cent, 
excess  profits,  the  majority  of  them  eventually  approved 
of  the  Government's  proposals.^^  Thus  a  final  adjustment 
between  mineowners  and  the  Government  was  reached 
only  three  years  after  a  similar  one  had  been  made  be- 
tween the  Government  and  the  owners  of  the  railways. 

In  the  autumn  of  191 7  the  Government  also  came  to 
terms  with  the  miners.  In  July,  the  Miners'  Federa- 
tion of  Great  Britain  had  held  its  annual  conference  at 
Glasgow.  Addressing  the  representatives  of  750,000 
workmen,  Mr.  Robert  Smillie,  President  of  the  Federa- 
tion, referred  to  the  Government's  control  of  the  mines. 
Since  the  mineowners  were,  it  was  understood,  to  be  se- 
cured in  their  pre-war  profits  whatever  the  price  of  coal, 
the  miners  should  be  entitled  to  similar  treatment.  The 
question  was  at  the  time  before  the  Coal  Control  Rates 
Board  and  might  have  to  be  raised  in  an  acute  form. 
The  miners,  having  given  the  Government  a  pledge  rela- 
tive to  non-stoppage  of  work,  would  assist  the  Board, 
always,  of  course,  short  of  compulsory  arbitration.  Al- 
though the  miners  were  able  to  force  an  increase  of 
wages  they  were  not  anxious  to  do  so  during  the  present 

^^L.  T.,  Oct.  II,  1917,  p.  6;  Nov.  9,  p.  10. 


THE    COAL   MINES 


89 


crisis.  It  would  be  better  that  the  cost  of  living  should 
come  down  than  that  wages  should  go  up.  After  a  long 
discussion  the  Conference  decided  to  make  a  "  general 
demand  for  an  increase  of  25  per  cent,  on  present  earn- 
ings over  the  whole  Federation  area  in  view  of  the  high 
cost  of  living."  ^^  Acquiescence  in  this  demand  would 
involve,  it  was  computed,  the  addition  of  one-half  million 
pounds  to  the  weekly  wage  bill  of  British  collieries.''^ 

A  week  after  the  Glasgow  Conference  ended,  some 
50,000  men  of  Lanarkshire  held  an  "  idle  day  "  (August 
2)  as  a  protest  against  profiteering  and  the  increased 
price  of  foodstufifs  and  other  necessaries.  At  noon  in 
thirteen  centres,  mass  meetings  called  for  strong  and 
speedy  government  action.^^  Before  the  end  of  the 
month  the  demand  for  an  increase  in  wages  was  pre- 
sented by  the  Executive  Committee  of  the  Miners'  Fed- 
eration to  the  Coal  Controller.  In  the  middle  of  Septem- 
ber Mr.  Calthrop  offered  an  advance  of  i  s.  a  day  to  per- 
sons over  18,  and  6  d.  a  day  to  those  under  18.  This  of- 
fer being  declined,  the  proposed  advances  were  raised  to 
I  s.  3  d.  and  7J4  d.  respectively,  but  conditions  were  now 
attached.  If  the  selling  price  of  coal  at  the  pit-head 
should  be  raised,  this  should  not  operate  to  secure  a 
further  wages  advance  under  local  conciliation  board 
agreements,  unless  the  increase  warranted  an  advance 
greater  than  the  present  offer.  If  the  cost  of  living 
should  fall,  there  should  be  a  corresponding  reduction  in 

51  Ibid.,  Jy.  25,  p.  3- 

52  L.  E.,  Jy.  28,  1917,  p.  144- 

53  L.  T.,  Aug.  3,  191 7,  p.  3- 


lull* 


I 


nm 


90 


WAR   TIME   CONTROL   OF   INDUSTRY 


THE   COAL    MINES 


91 


the  advance  now  to  be  made.^^  This  offer  too  was  re- 
jected, the  Federation  asking  that  the  advance  be  i  s. 
9  d.  a  day  for  persons  over  16,  10 j^  d.  for  those  under 
16.  Next  day,  however,  a  compromise  was  accepted. 
Wages  for  workers  over  16  and  for  those  under  16  were 
to  be  increased  by  is.  6  d.  and  by  9  d.  respectively.  It 
was  estimated  that  this  advance  would  involve  the  pay- 
ment of  an  additional  £20  million  annually  in  miners* 
wages.^^ 

Having  increased  the  miners'  wages,  the  Government 
had  to  seek  compensation  by  raising  the  price  of  coal  at 
the  mines,  an  advance  eventually  to  be  paid  by  the  con- 
sumer. It  the  middle  of  October  it  was  announced  that, 
to  meet  the  new  expenditure,  the  pit-head  price  of  coal 
would  be  increased  by  2  s.  6  d.  a  ton.  Coal  sent  to  the 
Allies  would  not  be  affected. ^^  At  the  same  time  the 
provisions  of  the  Price  of  Coal  Act  of  191 5  were  modi- 
fied. The  "  standard  amount,"  i.  e.,  the  amount  by  which 
the  pit-head  price  of  coal  may  exceed  the  prices  which 
prevailed  during  the  twelve  months  preceding  June  30, 
19 14,  had  been  fixed  by  the  Act  at  4  s.  It  was  now,  in 
the  case  of  the  mines  of  South  Wales,  Monmouthshire 
and  the  Forest  of  Dean,  made  9  s. :  elsewhere  it  should 
be  6  s.  6  d.  or  such  lower  sum  as  might  be  fixed  by  the 
Controller.^''     In  this  way  the  Government  demonstrated 

"  Ibid.,  Aug.  28,  p.  3 ;  Sept.  27,  p.  3. 

55  Ibid.,  Sept.  28,  p.  5. 

«6  Ibid.,  Oct.  13,  p.  6. 

"  Ibid.,  Oct.  16,  p.  7- 


that  increased  expenditure  for  labour  is  necessarily  re- 
flected in  increased  charges  to  the  consumer. 

That  the  account  of  the  activity  into  which  the  Gov- 
ernment was  led  through  its  attempts  to  limit  the  price  of 
coal  and  satisfy  the  demands  of  the  miners  might  be  con- 
secutive, its  endeavors  since  the  summer  of  19 15  to  con- 
serve and  increase  the  output  of  coal  have  been  neglected. 
It  will  be  remembered  that  at  the  very  time  of  the  South 
Wales  strike  in  191 5  a  great  meeting  had  been  planned  to 
rouse  enthusiasm   on   this   subject.     On  July  29,   Mr. 
Lloyd  George  addressed  more  than  2,000  representatives 
of  the  coal-mining  industry  in  the  London  Opera  House. 
To  repair  the  decline  of  3,000,000  tons  a  month  in  produc- 
tion, the  Government  suggested  that  masters  and  men  in 
the  various  coalfields  consider  jointly  whether  they  could 
suspend  the  Eight  Hours  Act  and  other  rules  and  customs 
established  for  the  protection  of  labour.     The  Govern- 
ment in  its  turn  was  ready  to  pledge  itself  to  restore  the 
Act,  rules,  and  customs  when  the  danger  was  past.     Mr. 
Robert  Smillie  replied  that  the  miners  might  agree  to  a 
suspension  of  the  Act,  might  even  assent  to  a  reduced  age 
limit  for  boy  workers  and  to  the  further  employment  of 
women ;  but  he  hoped  that  these  would  be  last  steps  and 
taken  only  if  the  need  were  vital.     The  conference  passed 
a  resolution  that  every  effort  should  be  made  by  owners 
and  workmen  to  secure  the  greatest  possible  output  of 
coal  during  the  war.^^ 

B8  A.  R.,  1915,  p.  149. 


92 


WAR   TIME   CONTROL   OF    INDUSTRY 


The  better  to  organize  the  distribution  and  exportation 
of  coal,  the  Board  of  Trade  in  February,  1916,  on  the 
nomination  of  various  coalowners'  associations,  appointed 
eleven  District  Coal  and  Coke  Supplies  Committees. 
Upon  them  in  the  future  lay  the  responsibility  for  seeing 
that  the  resources  of  their  districts  were  utilized  and  that 
requirements  for  important  industries  and  for  households 
were  met.  To  consider  their  recommendations  for 
economy  and  for  the  distribution  of  coal  and  coke  a 
Central  Committee  was  set  up.  Upon  it  were  placed 
representatives  of  all  the  government  departments  inter- 
ested in  the  coal  question,  and  from  it  emanated  decisions 
relative  to  the  adjustment  of  home  and  foreign  demand. 

A  direct  outcome  of  this  desire  to  direct  the  supply  of 
coal  into  the  most  important  channels  were  the  Priority 
Regulations  of  June  27,  1916."'^^  These  provided  that 
the  Admiralty  or  the  Army  Council  or  the  Minister  of 
Munitions,  after  consultation  with  the  Board  of  Trade, 
might  give  directions  as  to  the  priority  to  be  given  in  the 
execution  of  orders  or  contracts  for  supplies  of  coal  or 
Coke,  with  a  view  to  securing  precedence  for  orders  or 
contracts  in  accordance  with  their  national  importance. 
To  protect  the  contractor  who  had  been  directed  to  di- 
vert his  coal  in  the  national  interest,  the  Board  of  Trade 
announced  that  such  diversion  would  not  expose  him  to 
legal  measures  if  he  was  thereby  forced  to  break  a  con- 
tract.^^     During  the  few  months  preceding,  contractors 

50  2  D  under  the  Defence  of  the  Realm  Act ;  Cf.,  B.  T.  J.,  Je.  29, 
1916,  p.  878. 
«oB.  T.  J.,  Jy.  6,  1916,  p.  31. 


THE   COAL   MINES 


93 


k 


on  the  advice  of  the  Central  Coal  and  Coke  Supplies  Com- 
mittee had  been  inserting  in  their  contracts  a  clause  mak- 
ing the  contract  null  and  void  so  far  as  it  prevented  the 
fulfilment  of  government  requirements.®^  This  precau- 
tion now  became  unnecessary. 

Meanwhile  the  Government  was  carefully  taking  stock 
of  its  resources  and  on  September  i,  1916,  some  fifteen 
months  after  its  first  report,  the  Committee  on  output 
published  a  third  report.  The  aspects  of  the  earlier 
situation  were  reviewed  in  the  light  of  added  experience. 
Until  the  spring  of  19 16  the  total  output  of  British  coal 
mines  had  continued  to  decrease,  but  during  the  few 
months  preceding  the  report  improvement  had  set  in. 
Up  to  the  end  of  March  the  net  decrease  in  the  number 
of  persons  employed  at  the  mines  was  14.8  per  cent.,  one 
per  cent,  greater  than  a  year  earlier.  Measures,  however, 
had  by  that  time  been  taken  and  were  still  to  be  taken 
to  check  this  wastage.  On  November  8,  191 5,  the  Home 
Secretary  and  the  Director  General  of  Recruiting  had 
posted  notices  requiring  any  miner  who  enlisted  to  go 
back  to  work  until  called  upon,  his  readiness  to  enlist 
being  indicated  by  an  armlet.  Only  a  limited  number 
of  volunteers  were  accepted  for  tunnelling  at  the  front. 
On  June  i,  19 16,  more  vigorous  measures  were  taken. 
All  miners  in  the  home  service  units  unfit  for  foreign 
service  and  such  others  as  had  entered  the  home  units 
after  August  i,  191 5,  were  to  be  sent  back  to  the  mines. 
It  was  estimated  that  the  number  so  returned  would  be 

«iL.  E.,  Feb.  17,  191 7,  P-  329- 


r 


m' 


94  WAR   TIME   CONTROL   OF    INDUSTRY 

from  15,000  to  16,000  and  that  their  labour  would  in- 
crease the  output  of  coal  by  4,000,000  tons  annually.  At 
any  rate  the  output  did  expand  slightly,  though  the  total 
for  the  second  year  of  the  war  was  again  far  below  the 
normal.  The  production  during  three  successive  years 
was  as  follows: 

August,   1913-July,   1914 281,135,000  tons 

1914-  ;;    1915 250,368,000  " 

1915-  I9I6 250,748,000  " 

The  Committee  in  its  first  report  looked  with  hope 
toward  the  decrease  of  absenteeism,  estimating  that,  if 
the  4.8  per  cent,  which  was  avoidable  were  eliminated, 
the  output  of  coal  would  increase  by  13,000,000  tons. 
The  third  report  had  to  admit  that  no  improvement  was 
perceptible.     In  a  final  effort  the  Committee  in  April, 
1916,   had   induced    the   representatives   of   the   Miners* 
Federation  and  of  the  Mining  Association  of  Great  Brit- 
ain to  institute  for  every  pit  or  colliery-group  or  district 
a  committee  to  watch  over  and  deal  with  absenteeism. 
On  each  committee  the  owners  were  usually  represented 
by  three  members,  the  workmen  by  an  unlimited  number. 
By  the  end  of  August  ''  Absentee  "  committees  existed 
in  all  districts  except  North  Staffordshire,  West  York- 
shire, and  some  collieries  of  South  Wales.     Should  the 
persuasive  power  of  these  new  bodies  prove  ineffective, 
the  situation,  reflected  the  Committee  somewhat  gloomily, 
would  have  to  be  reviewed. 

More  reassuring  was  the  miners'  relinquishment  of  a 
part  of  their  holidays.     The  response  during  the  year  to 


THE    COAL    MINES 


95 


the  Committee's  representation  regarding  Christmas, 
New  Year's,  Easter,  and  Whitsuntide  had  been  hearty, 
and  normal  holidays  had  been  reduced  by  50  per  cent. 
The  Committee  was  of  the  opinion  that  a  further  reduc- 
tion would  be  unwarranted  and  would  increase  absentee- 
ism. 

Although  stoppage  of  recruiting  and  curtailment  of 
holidays  had  done  something  to  check  the  falling  output, 
and  the  control  of  absenteeism  might  do  more,  the  Com- 
mittee could  not  disguise  the  ominousness  of  the  export 
statistics.  In  1913  Great  Britain  exported  73^^  million 
tons  of  coal,  in  1914  59  millions,  in  191 5  43^2  millions. 
The  third  report  ends  with  the  same  note  as  the  first,  only 
with  increased  emphasis.  If  legitimate  requirements  are 
fully  to  be  met,  economies  must  above  all  be  practised  in 
the  consumption  of  coal.^^ 

At  a  National  Conference  of  representatives  of  the 
coal  mining  industry  on  October  25,  1916,  Mr.  Asquith 
and  Mr.  Herbert  Samuel  embodied  in  their  speeches  the 
findings  of  this  report.  The  diminished  output,  the  dan- 
gerously low  exportation,  the  persistence  of  avoidable 
absenteeism  were  set  forth.  To  remedy  the  last  the  Con- 
ference passed  a  resolution  pledging  its  best  effort.^^ 

At  the  same  time  the  National  War  Savings  Com- 
mittee, co-operating  with  the  Board  of  Trade,  appealed 
for  economy.  Since  coal  was  of  supreme  military  value 
and  no  substantial  increase  in  output  could  be  expected 

«2  cd.  8345. 

«3  L.  T.,  Oct.  26,  1916,  p.  7. 


96 


WAR    TIME   CONTROL   OF    INDUSTRY 


bli 


during  the  coming  winter,  the  exigency  could  best  be 
met  by  householders  restricting  their  purchases  to  the 
minimum.  Especially  could  those  householders  help 
whose  consumption  was  large  and  to  whom  one  or  two 
fires  less  would  mean  little.  By  a  saving  of  one-tenth 
in  fires  and  lights,  the  quantity  of  coal  available  could  be 
increased  by  three  or  four  million  tons.^* 

The  campaign  for  economy  was  continued  in  19 17. 
To  reduce  the  consumption  of  electricity,  the  linking-up 
of  large  electrical  systems  of  England  and  Scotland  was 
recommended  by  a  Lancashire  and  Cheshire  Committee. 
Despite  the  cost,  coal  would  be  saved  and  the  price  of 
the  electricity  could  be  reduced  by  the  municipalities  con- 
cerned.^5  It  was  suggested  too  that  central  power  sta- 
tions could  be  set  up  near  the  principal  collieries.^^  That 
water  gas  be  substituted  for  or  mixed  with  coal  gas  was 
recommended  at  the  annual  meeting  of  the  Institution  of 
Gas  Engineers.^^ 

In  June  and  July  measures  were  taken  to  store  up  sup- 
plies in  urban  centres  for  the  winter.  Local  authorities 
first  in  London  and  afterward  in  other  municipalities 
were  permitted  to  acquire  stocks  up  to  1,000  tons  for 
distribution  to  the  poor.  That  access  might  be  easy  the 
stocks  were  placed  in  various  depots,  and  a  provision  for 
sales  of  less  than  one  hundredweight  promised  employ- 

«*M.  G.,  Oct.  4,  1916.  p.  6. 

«5  American  Commerce  Report,  May  i,  1917. 
«« Ibid. 

«^M.  G.,  Je.  6,  1917. 


THE    COAL    MINES 


97 


ment  to  women  in  tending  small  scales.  In  general, 
however,  it  was  felt  that  distribution  could  best  be  made 
by  the  merchants,  and  householders  whose  means  per- 
mitted them  to  store  coal  before  winter  were  urged  to 
place  their  orders  with  them.  The  merchants  in  turn 
did  their  best  to  meet  this  early  demand,  delivering  more 
coal  than  during  the  corresponding  period  of  1915.^^ 
Not  only  were  efforts  of  this  kind  made  to  prevent  diffi- 
culties of  transportation  in  the  winter,  but  the  elaborate 
plan  of  the  Controller,  already  described,^^  looked  to- 
ward moving  coal  along  direct  routes  from  producing 
areas  to  the  nearest  consuming  centres."^^  During  May, 
June,  and  July  the  coal  conveyed  from  the  pit-mouth  to 
London  exceeded  by  250,000  tons  the  quantity  usually 
transported  during  these  months,  and  a  reserve  of  70,000 
tons  was  created.  It  was  expected  that  the  reserve  would 
be  increased  to  200,000  tons  by  the  end  of  September 
and  would  be  maintained  above  this  amount  during  the 
autumn  and  winter. 

While  much  was  thus  done  to  ease  the  task  of  the  rail- 
ways, the  Coal  Controller  on  August  10  took  the  final 
step  and  issued  an  order  to  limit  the  consumption  of  coal. 
By  this  Household  Coal  Distribution  Order,  19 17,  effec- 
tive August  17,  London,  the  metropolitan  area,  and  a 
number  of  districts  outside  were  rationed.  After  Octo- 
ber I  no  one  might  buy  for  a  dwelling  house  more  than 

«8  L.  T.,  Je.  26, 1917,  p.  3 ;  Jy- 14,  p.  3. 

^^  Cf.,  above  p.  12. 

70  L.  T.,  Aug.  17,  1917,  p.  3. 


I  i 


98 


WAR   TIME   CONTROL   OF    INDUSTRY 


2  cwt.  of  coal  a  week  for  four  rooms,  more  than  3  cwt. 
a  week  for  five  or  six  rooms,  more  than  one  ton  monthly 
for  seven  rooms,  more  than  2^  cwt.   for  eight  rooms, 
more  than  27  cwt.  for  nine  or  ten  rooms,  more  than  a 
ton  and  one-half  for  eleven  or  twelve  rooms,  more  than 
two  tons  for  thirteen  or  fifteen  rooms,  more  than  two 
and  one-half  tons  for  fifteen  or  more  rooms.     This  was 
to  be  the  allowance  from  October  i  to  March  31 ;  from 
April  I  to  September  i,  it  would  be  reduced  by  one-half. 
Coke  might  be  substituted  for  coal  in  the  ratio  of  four  to 
three;  the  anthracite  allowance  was  two-thirds  that  of 
other   coal.     An   additional   allotment   not   exceeding  2 
cwt.   a  week  might  be  granted   a  household  in  which 
through  the  presence  of  aged  or  invalid  persons,  children, 
or  lodgers  hardship  would  otherwise  arise. 

To  ensure  this  distribution,  every  metropolitan  dealer 
in  coal  was  required  to  take  out  a  licence  not  later  than 
September  20  registering  the  place  where  he  dealt  out 
coal.  Local  authorities  were  instructed  to  appoint  local 
coal  overseers  who  should  report  to  the  Controller  on 
the  facilities  for  storing  and  delivering  coal  within  their 
respective  districts  and  should  provide  for  the  safe  cus- 
tody of  any  reserve  stocks.  No  person  might  purchase 
more  than  2  cwt.  in  any  week  without  the  consent  of  the 
local  overseer,  nor  from  October  i  to  March  31  might  he 
buy  more  than  two  tons  at  any  one  time.  During  the 
same  six  months  not  more  than  one  ton  might  be  de- 
livered monthly  unless  the  registered  merchant  be  in  a 
position  to  fill  all  orders  up  to  this  amount  during  the 


THE    COAL    MINES 


99 


month  or  unless  the  customer  present  a  priority  order. 
Lastly,  the  Controller  might  from  time  to  time  determine 
the  maximum  price  to  consumers.*^^  The  motive  idea  of 
the  scheme,  so  cumbersome  in  the  phrasing,  was  to  guar- 
antee to  each  household  of  seven  rooms  or  more  at  least 
one  ton  of  coal  a  month  and  to  smaller  households  a  cor- 
respondingly smaller  amount.  Supervision  was  provided 
for  and  the  Controller  intimated  that  prices  should  not 
pass  a  certain  point  without  his  intervention. 

Immediately  protest  against  the  new  scheme  was  made 
by  the  London  Coal  Merchants'  Committee.  At  least  a 
month  beyond  October  i  would  be  needed  to  fill  the 
numerous  orders  now  on  hand  —  unless  these  were  to 
be  swept  into  the  waste  basket.  If  as  much  coal  could 
be  brought  to  London  as  the  Controller  indicated,  the 
regulations  were  unnecessary.  The  scheme  would  in- 
volve the  expenditure  of  additional  money  and  labour. 
Tickets  would  require  clerical  work,  and  telephone  orders, 
convenient  as  they  are,  would  cease.  The  carrying  of 
a  reserve  equivalent  to  five  weeks'  sales  would  tax  mer- 
chants' docking  facilities  and  leave  them  in  the  spring 
with  a  stock  depreciated  through  exposure.  Delivery  of 
coal  in  rotation  would  bring  difficulties  of  carriage.  In 
his  arrangements  the  Controller  should  have  consulted 
the  Merchants'  Committee,  a  group  of  experienced  men, 
and  should  have  appointed  them  to  carry  out  the  scheme 
in  the  districts  which  should  have  been  formed.^- 

71  L.  T.,  Aug.  13,  1917,  p.  4- 

72  L.  T.,  Aug.  18,  1917,  p.  8;  Sept.  i,  p.  2. 


V 


lOO 


WAR    TIME   CONTROL   OF   INDUSTRY 


1    ) 


One  concession  the  Controller  made.  The  reserve 
necessarily  kept  was  reduced  to  an  amount  three  times 
the  largest  week's  sales  of  the  current  year.  On  the 
other  hand,  it  was  stipulated  that  the  reserve  must  be 
completed  not  later  than  November  30  and  that,  until  it 
was  assured,  25  per  cent,  of  the  coal  received  each  week 
must  be  carried  in  stock.^^ 

By  these  regulations  the  Coal  Controller  took  a  final 
step  in  completing  the  system  of  state  control.     In  pos- 
session of  the  mines  and  of  the  railways  which  carry 
their  product,   the  actual   employer  of   all  labour  con- 
cerned, the  supervisor  of  all  factors  and  merchants,  the 
regulator  of  prices  at  every  stage  from  producer  to  con- 
sumer,  the   Government  now,   in   the  populous   Metro- 
politan  area,    became   practically    a   distributor,    telling 
citizens  how  much  coal  they  might  buy  and  under  what 
conditions  they  might  buy  it.     With  reluctance  it  had 
entered  upon  these  heavy  administrative   tasks.     From 
the  summer  of  191 5,  when  a  settlement  of  wages  and 
prices  first  became  imperative,  to  the  autumn  of  1916, 
when  the  taking  over  of  the  mines  seemed  advisable,  it 
had  been  content  with  general  and  occasional  regulations. 
During  1917,  however,  with  the  creation  of  a  Coal  Con- 
troller, wages,  profits,  prices,  transportation,  distribution 
had  been  closely  supervised,  and  at  the  end  of  the  year 
little  was  required  to  render  the  control  as  complete  as  a 
Socialist  would  desire. 

73  Ibid.,  Oct.  IS. 


WOOL  AND  WOOLLENS 

In  its  negotiations  regarding  the  railways,  the  coal 
mines,  and  the  production  of  iron,  steel,  and  munitions, 
the  Government  could  for  the  most  part  neglect  the  outer 
world.  The  questions  involved  were  largely  domestic 
and  the  Government  was  master  in  its  own  house.  To 
each,  of  course,  there  was  a  foreign  side.  The  railways 
carried  imported  products  from  the  ports  inland,  and  the 
condition  of  foreign  trade  was  reflected  in  the  congestion 
of  the  docks;  the  decline  in  the  output  and  exportation  of 
coal  created  a  situation  serious  for  Allied  buyers  and 
for  the  British  balance  of  trade;  and  the  iron  ore  mined 
in  England  was  insufficient  to  meet  the  demand,  making 
necessary  reliance  upon  Spanish  ores.  But  apart  from 
this  last  dependence,  the  situation  in  foreign  countries 
did  not  obtrude  itself  to  interfere  with  the  Government's 
plans. 

Very  different  are  the  conditions  now  to  be  considered. 
For  in  regard  to  certain  commodities  Great  Britain  is  de- 
pendent upon  foreign  sources  of  supply.  The  home  out- 
put of  wool  and  hides  is  of  course  considerable,  but  it  is 
smaller  than  the  imported  product.  Foodstuffs  have  to 
be  imported  in  different  proportions  —  meat  consider- 
ably, wheat  and  flour  extensively,  sugar  entirely.  Cotton 
and  tobacco  are  got  only  from  abroad.  Government  con- 
trol of  any  of  these  commodities  involves,  therefore,  the 

lOI 


II 


V 


I  If 

,  Hi 


HI 


m 


IHp 


1 02 


WAR    TIME    CONTROL    OF    INDUSTRY 


control  of  both  the  home  and  the  imported  supply,  or  of 
the  latter  in  case  this  is  the  only  one.  If  it  be  a  question 
of  price  fixing,  one  source  of  supply  may  be  easily  dealt 
with,  the  other  may  give  much  trouble.  If  there  be  only 
the  imported  product,  the  Government  may  be  able  to 
take  this  readily  into  its  own  hands. 

Another  feature  of  situations  of  this  kind  is  the  need 
of  maintaining  the  supply  of  the  commodity  in  question. 
Since  the  home  product  is  at  best  insufficient,  the  foreign 
supply  will  always  be  the  Government's  chief  concern. 
If  in  the  foreign  supply  there  be  for  some  reason  a  world 
shortage,  the  state  may  have  to  enter  the  world  market 
as  purchaser.  Such  crises  have  arisen  relative  to  wool, 
hides,  and  many  articles  of  food.  If,  on  the  other  hand, 
the  supply  is  comparatively  abundant  or  the  commodity 
relatively  unessential,  the  state  may  safely  leave  importa- 
tion and  purchase  in  private  hands.  So  it  has  done  with 
cotton  and  tobacco,  commodities  which  have  been  af- 
fected by  government  control  only  in  their  consumption. 

From  the  beginning  of  the  war  the  Government  has 
been  concerned  to  maintain  in  the  country  an  adequate 
supply  of  wool.  Not  only  was  this  in  order  that  civilian 
needs  might  be  met  but  also  that  the  men  of  the  army  and 
navy  might  be  clothed.  In  the  spring  of  1916  the  latter 
responsibility  brought  the  Government  face  to  face  with 
rising  costs,  and  in  the  interests  of  the  Exchequer  it  began 
to  fix  prices.  The  double  endeavour  to  secure  adequate 
supplies  and  to  keep  them  at  a  reasonable  price  has  led 
to  a  wide-reaching  control  of  the  woollen  industry. 


fl 


WOOL    AND    WOOLLENS 


103 


To  maintain  supplies  during  the  first  year  and  a  half 
of  the  war  was  not  difficult,  and  up  to  the  beginning  of 
19 1 6  the  supply  of  raw  wool  was  in  general  abundant. 
The  reasons  for  this  lay  in  world  conditions.  At  the 
beginning  of  the  war,  the  cessation  of  a  large  part  of  the 
Continental  demand  for  wool  left  on  the  market  a  surplus, 
much  of  which  was  attracted  to  the  United  Kingdom. 
Nine  hundred  million  pounds  were  retained  in  the  country 
during  19 15,  although  the  average  annual  pre-war  con- 
sumption had  been  only  five  hundred  and  fifty  million 
pounds.^  It  would  seem  that  the  Government  need  not 
have  troubled  itself  to  conserve  supplies,  but  for  a  time 
extreme  caution  was  shown. 

At  the  outbreak  of  the  war  the  woollen  trade  for  a 
short  time  suffered  from  the  wide-spread  paralysis  of 
industry.  The  September  London  sales,  at  which  some 
120,000  bales  of  wool  are  normally  disposed  of,  had  to 
be  postponed  for  a  week  and  then  only  50,000  bales  were 
offered.  The  market,  however,  proved  unexpectedly 
strong;  43,000  bales  were  sold  and  prices  maintained.^ 
Soon  government  orders  began  to  come  in  and  the  crisis 
was  past.  In  three  months  the  demand  for  wool  ro3e 
20  per  cent.  Steadily  government  needs  increased  until 
in  191 7  they  closely  approached  the  total  pre-war  con- 
sumption of  the  United  Kingdom.     In  March  of  that 

1  Cd.  8447,  p.  13.  Memorandum  on  War  Office  Contracts.  A 
paper  handed  in  to  the  Committee  on  Public  Accounts  by  Mr.  N.  F. 
Wintour,  Director  of  Army  Contracts,  Je.  7,  1917,  P-  I3-  From  this 
excellent  report  much  of  the  following  account  is  drawn. 

2  B.  T.  R.,  Oct.  I,  1914,  p.  204 ;  Nov.  2,  p.  255. 


m 


'  * 


ii' 


I-  I 


I 


i:* 


IR I 


104 


WAR   TIME   CONTROL   OF    INDUSTRY 


year  Mr.  Forster  told  the  Commons  that  the  army  an- 
nually requires  105,000,000  yards  of  khaki  and  115,000,- 
000  yards  of  flannel  — ''  enough  to  go  four  and  a  half 
times  round  the  earth  at  the  equator/'  ^ 

Foreseeing  its  requirements,  the  Government,  despite 
the  large  quantities  of  wool  coming  into  the  country  in 
the  autumn  of  19 14,  put  restrictions  upon  the  export  of 
certain   kinds  of   wool   and   cloth.     Licences    from  the 
Board  of  Trade  were  required  for  any  exportation.     If 
a  cloth  were  unsuitable  for  army  purposes,  the  licence 
was  readily  granted;  if  suitable,  a  licence  was  refused 
unless  the  cloth  were  for  the  military  purposes  of  the 
Dominions.     As   for  wool,   the  exportation  of  merino 
from  England  or  the  Colonies  was  to  a  considerable  ex- 
tent permitted,  but  not  that  of  crossbred,  more  suitable 
for  making  army  cloths,  except  that  at  times  this  was 
allowed  to  go  to  the  Allies.^     Notwithstanding  the  partial 
embargo,  the  home  market  during  the  winter  was  ill- 
supplied  owing  in  a  measure  to  delays  in  railway  trans- 
portation.^    At  the  same  time  the  exportation  of  Aus- 
tralian wool  to  America  was  forbidden  by  the  Australian 
Government,  there  being  a  suspicion  that,  thus  supplied, 
America  was  managing  to  get  a  part  of  her  own  clip  to 
Germany.     With  the  inclusion  of  wool  in  the  list  of  con- 
traband in  March,  this  situation  cleared  up  and  American 
buying  in  the  Colonies  was  again  permitted.® 

sCd.  8447,  p.  13;  P.  D.  C,  1917,  XC,  2192. 
*  B.  T.  J.,  Nov.  19,  1914,  p.  494 ;  Dec.  10,  p.  693. 
6B.  T.  R.,  Feb.  i,  1915,  p.  82. 
6  Ibid.,  Mar.  i,  p.  145;  Apr.  i,  p.  211. 


WOOL   AND   WOOLLENS 


105 


In  the  summer  of  191 5  the  Government,  having  ac- 
cumulated extensive  stocks,  could  afford  to  relax  restric- 
tions upon  exports.  The  country  had  even  become  em- 
barrassed by  its  surplus  supply  both  financially  and  in 
the  matter  of  storage.  Merinos  were,  therefore,  ex- 
ported still  more  freely;  crossbreds,  already  going  to 
France,  were  released  for  other  Allies  and  for  Norway 
and  Denmark,  an  embargo  on  125,000  bales  of  them  be- 
ing raised ;  ^  East  India  wool  might  go  to  the  United 
States.  Crossbred  tops  were  sent  more  liberally  than 
before  to  the  Allies  and,  under  satisfactory  guarantees, 
to  neutrals.^  The  year  ended  with  handsome  profits  for 
home  manufacturers,  even  the  fancy  houses  prospering, 
while  carpet  makers  shared  in  orders  for  blankets  and 
military  webbings.^ 

Nineteen  hundred  sixteen  brought  with  it  a  shortage 
in  the  world's  supply  of  wool,  the  effects  of  which  were 
to  be  far-reaching.  For  a  time  the  stocks  carried  over 
in  England  from  19 15  obscured  the  situation,  but  later 
it  became  apparent  that  the  world's  production  had  fallen 
off  20  per  cent.,  or  300  million  pounds.  A  serious 
drought  in  Australia  during  19 14-15  had  reduced  sheep 
flocks  from  82  million  head  to  69  million;  cattle  raising 
and  wheat  growing  were  successfully  competing  with  the 
production  of  wool  in  South  America.  To  intensify  the 
scarcity  in  Europe,  Japanese  buying  increased  and  the 

7  Ibid.,  Sept.  I,  p.  174;  Oct.  i,  p.  212. 

8  B.  T.  J.,  Oct.  21,  1915,  p.  173. 

» Weekly  Rec,  Jan.  25,   1916;  Annual  Fin.   and  Com.  Review, 
Jan.  21,  1916. 


io6 


WAR    TIME    CONTROL   OF   INDUSTRY 


I  '■ 


United  States  began  to  acquire  wool  on  an  unprecedented 
scale.     Just  before  the  war  American  import  duties  on 
wool  had  been  removed  and  war  prosperity  now  gave  in- 
creased purchasing  power.     In  the  1915-16  season,  the 
United  States'  purchases  in  Colonial  wool  markets  were 
nearly  ten  times  greater  than  the  average  purchases  of 
the  three  years  preceding  the  war,  amounting  to  almost 
20  per  cent,  of  the  world's  clip.     It  was  estimated,  too, 
that  during  1914-15  and   1915-16,   100  million  pounds 
of  wool  were  purchased  in  South  American  markets  on 
German   account    for   post-war   trade.  ^^     There  was   a 
feeling  in  the  British  wool  trade  that,  although  the  con- 
suming power   of   the   United   States  was  great,   large 
purchases  there  had  been  speculative,  made  in  the  hope 
of  reselling  to  Germany  after  the  war.^^     The  following 
table  shows  the  changes  in  production,  consumption,  and 
price  which  occurred  during  three  years  of  the  war.^^ 
The  Australasian  and  Cape  production  is  about  70  per 
cent,  of  the  world's  exportable  wool.^^ 


WOOL   AND   WOOLLENS 


107 


Exports  to  Europe 
and  America  (in 
bales) 


Average 
value 
per 
bale 


Consumption  (in  bales) 


Imported 

into 
England 


Australasian  Cape 

1913  2,296,000  484,000  £   16^ 

1914  2,33-2.000  499,000    17 

1915  2,157,000  519,000    19 

1916  1,919,000  500,000    27 


English  Continental  American 

1,043,000  1,675,000   54,000  1,646,000 

968,000  1,689.000  169,000  1,601,000 

1,923,000  212,000  551,000  2,171,000 

1,384  000  273,000  720,000  1,496,000 


By  the  beginning  of  1916  prices  in  Great  Britain  re- 
flected the  coming  scarcity.     According  to  the  quality 

10  Cd.  8447.  p.  13. 

11  B.  T.  R.,  Feb.  i,  1916,  p.  62. 

12  L.  E.,  Feb.  17,  1917,  pp.  313-314. 

13  M.  G.,  Dec.  29,   1916. 


of  the  wool  the  advance  was  from  40  per  cent,  to  100  per 
cent.  It  was  stimulated  by  the  purchases  of  merchants 
and  manufacturers  anxious  to  protect  themselves  against 
the  persistent  rise,  and  by  the  activity  of  speculators  out- 
side the  wool  trade  but  attracted  to  it  by  the  profits  real- 
ized. British  and  Allied  demand  for  the  finished  product 
contributed.  The  increased  prosperity  of  the  working 
classes  made  them  better  buyers ;  the  War  Office  was  plac- 
ing very  large  orders ;  and  for  a  time  the  Allies  competed 
with  the  Government.  The  last  factor  was  at  length 
eliminated  by  the  placing  of  all  Allied  orders  through  the 
Army  Contracts  Department,  but  the  other  factors  re- 
mained. 

The  Government  now  became  concerned  for  its  own 
purchases.  Restrictions  were  again  placed  upon  exports. 
Although  limited  quantities  of  merino  wool  were  for  a 
time  allowed  to  go  to  European  neutrals,^*  no  licences 
whatever  for  America  could  be  got  in  London.  A  month 
or  two  later  all  neutral  purchases,  first  of  crossbreds  then 
of  merinos,  were  barred.^^ 

Under  normal  conditions  the  Government  had  pre- 
ferred to  do  its  buying  through  competitive  tendering; 
but  its  rivalry  with  the  civilian  and  export  trades  was 
making  this  impossible  save  at  exorbitant  prices.  Even 
when  manufacturers  w^ere  willing  to  forego  high  profits 
on  war  work,  their  competitors  in  the  civil  trade  could 
offer  higher  wages  to  labour  and  could  outbid  them  for 

1*  B.  T.  J.,  Apr.  13,  1916,  p.  82. 
15  L.  E.,  Feb.  17,  1917,  p.  312. 


I  \ 


io8 


WAR   TIME   CONTROL   OF   INDUSTRY 


raw  material.  The  Government's  first  plan  under  these 
circumstances  was  to  requisition  the  output  of  factories, 
paying  the  manufacturer  the  cost  of  production  and  a 
reasonable  profit.  An  Order  in  Council  of  February  15, 
19 1 6,  bestowed  upon  the  War  Office  power  to  do  this, 
together  with  authority  to  require  manufacturers  to  fur- 
nish information  as  to  output,  cost  of  production,  and 
profit.  A  census  of  machinery,  labour,  productive  capac- 
ity, and  stocks  of  raw  material  was  accordingly  taken. 
World  movements  of  supplies  and  prices  were  investi- 
gated. War  Office  accountants  examined  the  books  of 
typical  firms  to  ascertain  ''  costings."  Committees  from 
sections  of  the  trade  and  trade  experts  appointed  to  be 
'officers  of  the  Army  Contracts  Department  worked  over 
conversion  costs  at  the  various  stages  of  manufacture. 

The  results  were  unsatisfactory.  Owing  to  the  excited 
state  of  the  raw  wool  market  and  the  varying  prices  at 
which  manufacturers  had  purchased  raw  material,  the 
market  prices  of  the  day  had  to  be  taken  as  the  basis  for 
costings.  With  a  rising  market  the  advantage  was  al- 
ways with  the  manufacturers,  always  against  the  Depart- 
ment. To  attain  a  satisfactory  system  of  costings,  con- 
trol of  the  raw  material  was  essential ;  and  the  necessity 
of  securing  adequate  supplies  made  it  desirable  as  well.^^ 

For  these  reasons,  the  Department  in  May,  19 16,  de- 
cided to  take  over  the  clip  of  the  United  Kingdom,  the 
wool  being  crossbred  and  in  the  main  suitable  for  military 
purposes.     On  June  8  dealings  in  wool  grown  on  sheep 

i«  Cd.  8447,  p.  13. 


WOOL   AND    WOOLLENS 


109 


in  the  United  Kingdom  during  the  season  of  19 16  were 
forbidden. ^^     The  prices  to  be  paid  to  British  growers 
were,  after  much  consideration,  agreed  upon  as  those 
ruling  in  July,  19 14,  increased  by  35  per  cent.,  an  estimate 
of  the  increased  cost  of  production.     The  Government 
had  at  first  offered  an  increase  of  30  per  cent,  but  the 
farmers  stood  out  for  the  higher  figure.^«     Throughout 
Great  Britain  the  normal  machinery  of  the  trade  was,  as 
far  as  possible,  utilized  in  carrying  out  the  transaction. 
Merchants,  authorized  by  the  Department  and  paid  in 
proportion  to  the  weight  of  the  wool  which  they  handled, 
did  the  buying,  supervised  in  each  of  several  districts 
by  experienced  buyers  who  had  been  appointed  Deputy 
Executive  Officers.     The  wool  thus  acquired  was  taken 
to  a  huge  clearing  house  at  Bradford,  where  it  was  graded 
and  finally  valued.     In  Ireland  the  established  dealers, 
who  buy  from  farmers,  store  keepers,  and  others,  were 
asked  to  make  the  purchase  on  commission,  and  a  fixed 
schedule  of  prices  was  drawn  up  for  them  by  the  Gov- 
ernment.    The  total  cost  of  the  19 16  clip  was  estimated 
at  from  £7,500,000  to  £8,000,000.^^ 

Considerable  dissatisfaction  was  expressed  in  Parlia- 
ment in  November  at  the  methods  adopted  in  taking  over 
the  wool.  Mr.  Prothero,  soon  to  be  Minister  of  Agri- 
culture, declared,  **  You  could  not  have  had  that  purchase 
carried  out  in  a  way  that  would  have  given  more  dis- 

17  B.  T.  J.,  Je.  15,  1916,  p.  730. 

18  B.  T.  R.,  Aug.  I,  1916,  p.  77- 

i»Cd.  8447,  p.  14;  B.  T.  J,  Jy.  27,  1916,  p.  233. 


no 


WAR    TIME   CONTROL   OF   INDUSTRY 


content  to  the  agricultural  community."  In  two  respects 
there  had  been  a  loss  to  the  nation.  The  wool  was  left 
in  places  where  it  deteriorated  in  quality;  and  because 
it  was  not  paid  for  promptly  farmers  had  been  obliged  to 
sell  their  catde  before  the  latter  were  fit  for  the  butcher. 
Mr.  Bentham  compared  the  dilatoriness  of  the  Govern- 
ment with  the  promptness  always  shown  by  the  private 
buyer,  who  paid  on  the  spot.  Sir  John  Spear  asserted 
that  the  prices  received  would  not  be  really  35  per  cent, 
in  advance  of  those  of  June  and  July,  1914.  It  had  been 
understood  that  the  wool  would  be  taken  in  bulk  as  had 
always  been  the  case;  but  a  system  of  grading  was  intro- 
duced which  made  marked  differences.  A  Devon  farmer 
had  proved  that  he  received  £14  less  than  the  price  prom- 
ised by  the  Government. ^^ 

Whether  satisfactorily  or  not,  the  clip  of  the  United 
Kingdom  was  appropriated  by  the  end  of  the  year;  but 
this  clip  constituted  only  one-ninth  of  the  British  con- 
sumption of  wool  in  19 1 5.  It  was  highly  desirable, 
therefore,  that  action  be  taken  to  secure  the  Australasian 
clip,  which  amounted  to  one-half  of  the  world's  exporta- 
ble crossbred  and  merino.  During  the  season  of  19 15-16 
the  Australasian  Governments,  at  the  request  of  the  home 
Government,  had  placed  an  embargo  on  the  exportation 
of  wool  to  other  than  Allied  countries.  Despite  this 
America  had  acquired  almost  25  per  cent,  of  their  clip, 
the  embargo  proving  intermittent.  To  assure  itself  of 
supplies,  the  home  Government  now  proposed  to  the  two 

20  p.  D.  C,  1916,  LXXXVIT.  878,  870-871 ;  932,  1232. 


WOOL   AND    WOOLLENS 


III 


Colonial  Governments  the  purchase  of  all  their  crossbred 
wool  in  1916-17,  about  two-fifths  of  their  clip.  To  this 
proposal  they  answered  that  it  would  be  impracticable 
to  discriminate  between  growers  and  users  of  different 
kinds  of  wool  and  offered  to  sell  the  entire  clip.  After 
considerable  discussion,  the  home  Government  in  Novem- 
ber, 19 16,  accepted  the  offer.  A  proposal  to  purchase  the 
South  African  clip  also  was  discussed  but  rejected,  since 
the  quality  of  the  wool  blended  less  well  for  army  pur- 
poses. As  it  was,  the  Government's  action  was  adversely 
criticized  by  some  sections  of  the  trade  and  declared  un- 
necessary. 

Before  the  purchase  was  arranged,  one-fourth  of  the 
Australasian  clip  had  been  sold  at  public  auction.  So 
far  as  these  sales  were  on  British  or  Allied  account,  the 
wool  was  allowed  to  go  forward.  As  for  the  remainder 
of  the  clip,  about  500  million  pounds,  the  Governments  of 
Australia  and  New  Zealand  were  to  act  as  sole  agents  of 
the  British  Government.  Wool  required  by  local  manu- 
facturers was  unaffected.  The  prices  to  be  paid  were 
55  per  cent,  above  the  average  1913-14  prices  realized 
by  growers  in  Australia,  and  worked  out  at  about  15^2  d. 
per  pound  greasy  wool.  Should  the  home  Government 
realize  any  profit  on  its  sales,  this  was  to  be  shared  with 
the  Colonial  Governments.  The  cost  was  appraised  at 
£22  millions  for  the  balance  of  the  Australian  clip,  at 
£13  millions  for  the  clip  of  New  Zealand.^^  Although 
the  South  African  clip  was  not  purchased,  an  Order  in 

21  Cd.  8447,  p.  14. 


112 


WAR   TIME   CONTROL   OF    INDUSTRY 


Council  of  April,  191 7,  announced  that  any  imported 
wool  must  first  be  offered  for  sale  to  the  Director  of 
Army  Contracts.  Thus,  in  one  way  or  another,  most  of 
the  raw  wool  of  the  Empire,  or  about  70  per  cent,  of  the 
world's  exportable  supply,  came  under  state  control. 

The  distribution  of  the  wool  acquired  by  the  Govern- 
ment now  became  a  matter  of  great  concern  to  the  trade. 
The  British  clip  had  been  apportioned  through  selected 
firms  of  wool  merchants  to  manufacturers  who  supplied 
the  Government's  military  needs.  Any  surplus  not 
needed  by  Great  Britain  or  the  Allies  was  sold  by  auction 
at  unreported  prices.  Brokers  had  suffered  somewhat, 
but  19 16  had  not  been  an  unprofitable  year  for  manufac- 
turers. New  trade  rules,  such  as  shorter  credit  periods 
and  a  standard  measure  (38  inches  to  the  yard),  had  been 
adopted.22  Above  all,  the  careful  placing  of  Govern- 
ment orders,  as  well  as  large  ones  from  Russia,  in  such 
way  as  to  keep  factories  steadily  running  had  conduced 
to  prosperity. ^^  There  were,  to  be  sure,  complaints  from 
worsted  manufacturers  that  the  prices  allowed  them  on 
Government  purchases  could  be  accepted  only  through 
patriotic  motives ;  but  fine  worsteds  were  in  demand  from 
neutral  countries,  which  were  undeterred  by  high  prices. ^^ 

In  December,  19 16,  however,  consternation  ruled 
among  Bradford  and  London  brokers;  for  it  was  an- 
nounced that  the  Government  would  suspend  the  London 
auction  sales  of  wool.     A  deputation  of  the  trade  waited 

22  L.  T.,  Jan.  19,  IQ17,  p.  8;  M.  G.,  Dec.  28,  1916,  p.  6. 

23  M,  G.,  Nov.  22,  1916,  p.  9. 

24  Ibid.,  Dec.  13,  p.  9. 


WOOL   AND   WOOLLENS 


113 


upon  the  Financial  Secretary  of  the  War  Office  to  urge 
that  the  sales  be  continued.  They  were  told  that  the 
Government  would  deliver  the  wool  for  military  purposes 
directly  to  users  and  that  the  remainder  would  not  neces- 
sarily be  sold  at  auction.  During  the  last  twenty  years 
wool  so  sold  had  decreased  from  70  per  cent,  to  30  per 
cent,  of  that  imported ;  most  wool  now  went  directly  from 
the  Colonies  to  the  manufacturers.^^  After  consultation 
with  experts,  the  Government  decided  to  send  such  wool 
as  could  be  easily  graded  directly  to  the  contractors,  and 
to  have  such  as  was  suitable  for  top-making  combed  into 
tops  on  commission  for  the  Department  and  sold  in  that 
form  at  fixed  prices.  Since  it  was  desired  to  exercise 
priority  as  to  the  use  of  all  wool,  sale  to  the  highest  bid- 
der at  auction,  regardless  of  the  use  which  he  might  make 
of  his  purchase,  was  impossible.  Hence,  although  it  was 
arranged  that  distribution  should  in  the  future  as  in  the 
past  take  place  in  the  public  auction  rooms,  no  bidding 
was  allowed.  Wool  was  allotted  by  the  London  Wool 
Selling  Brokers'  Association  at  fixed  prices  to  approved 
users  in  accordance  with  their  requirements.^^  As  to 
priority,  after  the  Government's  own  contractors,  pre- 
ference was  given  to  manufacturers  for  the  export  trade. 
In  19 1 6  this  had  been  10  per  cent,  of  the  country's  total 
exportation  of  manufactured  products  and  had  rendered 
great  service  in  helping  pay  for  imports. ^^ 

25  M.  G.,  Nov.  28,  1916,  p.  9;  Dec.  29. 

26  Cd.  8447,  p.  15. 

27  M.  G.,  Dec.  29,  1916. 


»^i 


114 


WAR    TIME    CONTROL    OF   INDUSTRY 


•I 


The  prices  at  which  wool  was  to  be  sold  by  the  Govern- 
ment were  fixed  at  two  hvels  and  the  situation  created  is 
as  follows.     If  a  Depaitment  contract  is  in  question,  the 
price  is  based  on  the  cost,  plus  a  margin  for  administra- 
tive and  other  charges.     The  Allies,  too,  may  buy  wool 
for  military  purposes  at  this  price  on  the  understanding 
that  any  economy  realized  will  accrue  to  the  Govern- 
ment concerned.     If  the  wool  sold  be  for  civilian  use,  the 
price  is  that  of  January,   1917,  originally  20  per  cent, 
above  the   military-issue  price.     The   divergence  arises 
from  the  fact  that  the  Government  in  initiating  its  sales 
in  January  would  have  disorganized  the  trade  had  it  sold 
at   20   per   cent,   below   market   prices.     Merchants   and 
manufacturers  had  already  made  purchases  on  the  as- 
sumption that  there  would  be  no  interference  with  the 
civilian  trade.     It  was  best  for  the  Department  to  take  a 
profit. 

The  determination  of  the  prices  which  should  be  paid 
to  manufacturers  for  Government  work  was  a  more  com- 
plicated matter.     In  the  spring  of   19 16  the  prices  had 
baffled  accountants,  because  the  cost  of  the  raw  material 
was  unstable.     Under  the  new  conditions  technical  ex- 
perts of  the  Department  again  set  to  work  on  conversion 
costs,  i.  e.,  the  costs  of  converting  wool  from  one  stage 
of  manufacture  to  the  next.     Difficulties  in  ascertaining 
these  arise  from  the  shrinkage  or  wastage  of  wool  as  it  is 
changed  into  finished  cloth  and  from  the  number  of  pro- 
cesses which  it  undergoes,  the  profit  on  each  conversion 
being  extremely  small.     Despite  the  difficulties,  success 


WOOL  AND   WOOLLENS 


115 


now  attended  the  Department's  efforts.     In  the  case,  for 
example,  of  serge  drab-mixture  cloth,  conversion  costs 
and  shrinkage  were  arrived  at  which  reduced  a  competi- 
tive price  of  8  s.  3  d.  per  yard  to  7  s.     The  saving  was 
£20,000  weekly.     Conversion  costs  and  shrinkage  once 
ascertained,  the  manufacturer  was  allowed  a  price  based 
on  these,  on  the  cost  of  the  raw  wool,  and  on  pre-war 
rates  of  profit,  which  averaged  about  5  per  cent.     On  this 
basis  the  Department  estimated  that  its  yearly  saving  on 
orders  for  cloth  and  hosiery  would  be  about  £3,700,000.28 
Other  advantages  secured  by  the  Government's  pur- 
chase and  sale  of  all  native  and  Australasian  wool  at 
fixed  prices  can  be  less  exactly  stated  but  are  unques- 
tionable.    In  the  first  place,  manufacturers  in  the  civil 
trade  were  benefited  by  getting  wool  at  a  steady  price 
for  a  certain  period  ahead  and  at  one  which  has  been  5 
per  cent,  or  10  per  cent,  below  more  recent  world  market 
prices.     How  much  the  price  of  wool  would  have  risen 
in   1917  without  the  Government's  action  is  of  course 
hypothetical.     During  the  previous  year  crossbreds  had 
gone  up  30  per  cent.,  merinos  50  per  cent.     If  it  be  as- 
sumed that  the  further  advance  would  have  been  no  more 
than  10  per  cent.,  the  Government's  saving  on  that  part 
of  the  Colonial  clip  required  for  military  purposes  was 
£2,500,000. 

Further  economies  have  accrued  to  the  Government 
and,  in  a  measure,  to  the  community,  from  the  technical 
knowledge  of  expert  advisors.     In  the  spring  of    19 16 

28  Cd.  8447,  p.  16. 


"*#! 


w  B 


IM 


ii6 


WAR    TIME    CONTROL    OF    INDUSTRY 


the  salvage  of  old  uniforms  began,  and  within  a  year 
5,000  tons  of  worn  khaki  were  turned  into  shoddy.  In 
November  the  Department,  taking  note  of  the  remnants 
of  cloths  issued  for  the  making  of  shirts  and  of  dress 
clothing,  announced  that  it  would  take  possession  of  them 
henceforth. ^^  By  the  skilful  use  of  wool  waste,  noils, 
and  rags  it  appeared  that  cloth  could  be  made  of  as 
great  durability,  warmth,  and  strength  as  similar  cloths 
made  entirely  from  wool  and  that  it  could  be  produced 
at  a  greatly  reduced  cost.  Experts  with  special  knowl- 
edge and  experience  in  blending  wool  and  wool-wastes 
became  officers  of  the  Department  and  thenceforth  in- 
structed manufacturers  in  the  new  art.  Particularly 
happy  was  the  application  of  the  process  to  the  making 
of  greatcoating  cloth.  Where  10  s.  or  10  s.  6  d.  per  yard 
had  been  paid  for  this  material,  its  cost  was  now  reduced 
to  9  s.  Manufacturers  of  it  were  given  full  information 
of  the  particular  blend  secured  and  the  entire  trade 
profited  by  the  innovation.^^  In  the  summer  of  19 17 
there  was  experimenting  in  the  use  of  smaller  spun 
worsted  yarns  and  of  mungo.  Drab  serge,  it  was  pro- 
posed, should  be  made  either  out  of  2-2 1's  or  2-24's  with 
the  woollen  weft  of  50  per  cent,  pure  wool  and  50  per 
cent,  mungo.  The  cloth  produced  would  be  wearable 
and  would  be  of  excellent  heat-retaining  quality.  Indeed, 
Bradford  cords  made  as  officers'  cloths  independently  of 
the  War  Office  already  contained  a  far  larger  percentage 

29  D.  R.  M.,  3rd  ed.,  p.  178. 

30  Cd.  8447,  pp.  15,  16. 


WOOL   AND   WOOLLENS 


117 


of  mungo  than  the  Bradford  cords  required  by  the  War 
Office.3^  Accordingly,  the  trade  was  ready  to  support 
the  Government  in  the  utilization  of  substitutes  for  wool, 
the  more  readily  as  such  action  promised  a  great  expan- 
sion in  output. 

The  Government's  success  in  administering  the  woollen 
industry  necessarily  depends  in  large  measure  upon  the 
Committees,  representative  of  the  trade  or  of  the  districts 
concerned,  which  have  been  set  up  to  assist  it.     Of  these 
there  are  several.     In  the  matter  of  the  purchase  of  the 
home  clip  advice  is  given  by  a  Central  Committee  on  the 
Purchase  of  British  Wool  and  complaints  from  farmers 
come  in  through  District  Committees.^^     Qther  District 
Committees,  twelve  in  number,  allocate  contracts  among 
manufacturers,   and  their  chairmen  compose  a  Central 
Advisory   Committee   on    the    Allocation    of    Contracts. 
The  contracts  which  they  apportion  are  first  passed  upon 
by  a  War  Department  Cloth  Office,  set  up  at  Bradford 
and  comprising  a  large  number  of  business  men  from  the 
trade,  each  a  specialist  in  his  department.     The  Bradford 
Office  is  in  close  touch  with  the  Contracts'  Department 
in  London,  and  through  it  the  latter  has  attempted  to  in- 
troduce self-government  in  the  allocation  of  contracts. 
Beside  these  administrative  advisory  bodies  there  is  an- 
other which  may  be  called  legislative,  the  Central  Wool 
Advisory  Committee.     Resulting  from  an  amalgamation 
of  several  small  committees  which  advised  the  Govem- 

81 L.  E.,  Aug.  4,  1917,  p-  194. 
32  B.  T.  J.,  Aug.  24,  1916,  p.  550. 


ii8 


WAR    TIME    CONTROL   OF    INDUSTRY 


WOOL   AND   WOOLLENS 


119 


ment  in  December,  19 16,  when  the  purchase  of  the  Aus- 
tralasian cHp  and  the  distribution  of  it  were  under  con- 
sideration, this  body  gives  advice  on  questions  of  general 
policy.  On  it  are  representatives  of  all  sections  of  the 
trade  from  importing  wool  houses  to  exporting  cloth 
merchants,  and  labour  is  also  represented.^^  In  the  spring 
of  1917,  it  made  irfiportant  recommendations,  the  adop- 
tion of  which  embarked  the  Government  on  a  new  policy 
leading  in  turn  to  the  creation  of  a  new  board. 

The  new  policy,  and  one  not  confined  to  the  woollen 
industry,  was  that  of  very  carefully  conserving  supplies, 
even  to  the  extent  of  rationing  manufacturers  or  con- 
sumers. It  was  induced  by  the  serious  state  of  the  na- 
tion's shipping,  and  it  was  to  reach  to  many  commodities 
which  are  imported  in  large  quantities.  On  April  19, 
1917,  the  Central  Wool  Advisory  Committee  recom- 
mended to  the  Government  that  it  be  applied  to  the  manu- 
facture of  woollens  and  worsteds.  Owing  to  the  existing 
wool  situation  and  the  heavy  military  needs,  the  Com- 
mittee explained,  there  should  be  accumulated  a  consider- 
able reserve  of  wool.  To  achieve  this  and,  as  far  as  pos- 
sible, to  maintain  the  export  trade,  production  for  home 
consumption  should  be  curtailed.  This  could  best  be 
brought  about  by  applying  the  priority  scheme  already 
worked  out  by  a  committee  of  manufacturers  and  mer- 
chants appointed  by  the  Army  Council.  Substitutes  for 
wool  should,  as  far  as  possible,  be  used  in  the  civil  trade. 
As  precautionary  measures,  no  distribution  of  Govem- 

"  Cd.  8447.  pp.  15,  23. 


ment  wool  or  tops  should  take  place  until  after  the  end 
of  May;  manufacturers  and  spinners  should  be  warned 
that  their  use  of  present  stocks  would  affect  future  alloca- 
tions; and  drastic  action  should  be  threatened  if  manufac- 
turers and  traders  attempted  to  exploit  the  curtailment  by 
increasing  the  prices  of  materials  in  stock.^^ 

These  recommendations  meant  the  pushing  of  the 
priority  scheme  until  manufacturers  were  rationed  in 
their  production  for  home  civilian  needs.  The  scheme 
in  question,  first  applied  to  munitions  of  war,^^  was  ex- 
tended in  full  measure  to  woollen  and  worsted  goods  by 
an  order  of  the  Army  Council  on  April  14,  1917.^^  In 
this  order  it  was  provided  that  all  manufacturers  of  such 
goods  should  give  priority  to  contracts  according  to  a 
rating  of  these  as  of  Class  A,  Class  B,  or  Class  C.  Class 
A  comprised  all  military  orders  of  Great  Britain  or  the 
Allies;  Class  B,  orders  for  goods  destined  for  export  and 
other  orders  approved  by  the  Director  of  Army  Contracts 
as  being  for  work  of  national  importance ;  Class  C,  orders 
looking  toward  the  supply  of  civilian  needs.^"^ 

A  deferring  of  orders  of  Class  C  by  manufacturers 
until  orders  of  the  other  two  classes  were  filled  would 
have  been  the  normal  outcome  of  this  scheme.  So  it  had 
been  with  priority  in  the  products  of  iron  and  steel. 

3*  B.  T.  J.,  Apr.  26,  1917. 

35  Cf.,  above  p.  43. 

36  In  Oct.,  1916,  the  Army  Council  had  ordered  that  in  all  fac- 
tories, the  business  of  which  was  wholly  or  partly  the  making  of 
worsted  or  woollen  goods,  priority  should  be  given  to  Government 
orders ;  B.  T.  J.,  Oct.  26,  1916,  p.  269. 

37  B.  T.  J.,  Apr.  26,  1917. 


I20 


WAR   TIME    CONTROL   OF    INDUSTRY 


Actual  rejection  or  disregard  of  orders  of  Class  C  might, 
however,  be  necessitated  if  the  manufacturer  were  obliged 
to  curtail  the  working  hours  of  his  factory  or  if  he  should 
have  only  a  limited  amount  of  raw  material  to  work 
upon.  In  the  woollen  industry  the  Government  created 
both  these  conditions. 

Again  it  was  the  Central  Advisory  Committee  that  on 
May    17,   after    further  consideration   of   the   situation, 
recommended  the  measures  embodied  in  an  order  of  the 
Army  Council  on  May  24.     To  avoid  an  almost  inevita- 
ble drastic  curtailment  of  hours  of  employment  in  the 
winter  months,  the  order  provided   for  the  immediate 
reduction  of  weekly  hours  by  20  per  cent.,  or  from  55^ 
to  45.     It  further  provided  that  another  group  of  com- 
mittees, six  District  Priority  Committees  with  a  Central 
Committee  in  London,  should  lay  down  the  conditions 
under  which  crossbred  wool  or  tops  might  be  used  after 
June  II  and  merino  wool  or  tops  after  July  2,  and  should 
in  addition  ration  out  to  manufacturers,  spinners,  and 
others  in  their  respective  districts  such  supplies  of  wool 
as  might  be  available  for  civilian  consumption.^^ 

Curtailment  of  supplies  of  raw  material  and  limitation 
of  production  were  thus  decreed.  The  Yorkshire  Post 
estimated  that,  while  one-half  of  the  machinery  in  the 
wool-using  trades  would  be  engaged  in  military  work, 
two-thirds  of  the  other  half  of  it,  devoted  to  the  civilian 
trade   at   home   or   abroad,    would    become    idle.^^     No 

S8L.  T.,  May  25,  1917,  P-  3 ;  B.  T.  J.,  May  31,  p.  469. 
"  U.  S.  Commerce  Reports,  Jy.  3,  1917. 


» 


WOOL   AND    WOOLLENS 


121 


fears,  however,  were  entertained  of  an  immediate  short- 
age in  civilian  cloths,  with  which  many  of  the  larger 
houses  were  well  stocked.*^  But  when  spinners  got  from 
the  District  Priority  Committees  their  June,  July,  and 
August  allotments  for  the  civilian  trade,  many  of  them 
found  that  in  one  month  they  had  consumed  more  than 
the  allotment  gave  them  for  three.  It  was  pointed  out 
that  the  allocation,  which  in  general  was  about  60  per 
cent,  of  the  amount  applied  for,  was  in  many  cases  in- 
sufficient to  enable  the  machinery  to  run  the  full  45  hours 
to  which  working  time  had  been  reduced.  Rather  than 
stop  it  spinners  had  used  what  stocks  they  possessed  re- 
gardless of  whether  this  was  authorized  or  not.*^  To 
appease  discontent  Mr.  H.  W.  Forster,  M.  P.,  Financial 
Secretary  to  the  War  Office,  addressed  a  large  meeting 
of  traders  at  Bradford,  giving  the  statistics  of  stocks  of 
wool  on  hand  and  of  prospective  imports  upon  which  the 
Department  had  based  its  restrictive  policy.  At  once 
the  accuracy  of  the  figures  was  challenged  and  the  out- 
come of  the  discussion  was  the  appointment  of  a  Com- 
mittee to  confer  with  the  Department  regarding  them.*^ 
Meanwhile  the  Government's  administration  was  fur- 
ther criticized.  A  newly  formed  Wool  Textile  Associa- 
tion of  the  United  Kingdom,  through  its  executive  com- 
mittee, demanded  that  the  w^ool-control  scheme  in  matters 
of  policy  and  administration  be  taken  out  of  the  hands 
of  officials  and  be  turned  over  to  a  board  of  practical  men 

*o  M.  G,,  May  9,  1917,  p.  7 ;  Weekly  Record,  May  i. 
*iL.  T.,  Jy.  3,  1917,  p.  13;  Jy.  13,  p.  13;  Aug.  4,  p.  194. 
*2  L.  E.,  Jy.  28,  1917,  p.  145. 


122 


WAR    TIME    CONTROL   OF    INDUSTRY 


like  the  boards  set  up  for  the  cotton  and  shipping  trades.*^ 
To  this  demand  the  Department  in  a  measure  acceded. 
Ahhough  it  would  make  no  change  in  Committees  dealing 
with  the  purchase  and  distribution  of  raw  wool,  retaining 
in  particular  the  Central  Wool  Advisory  Committee,  and 
although  it  would  reserve  for  itself  the  ultimate  decision 
regarding  prices,  the  necessary  reserve  of  wool,  and  the 
allocation  of  Government  contracts,  it  proposed  to  re- 
place the  Priority  Committees  by  a  Board  of  Control 
sitting  at  Bradford.     This  Board,  upon  which  an  equal 
number  of  representatives  of  employers  and  of  employes 
should  sit  beside  certain  representatives  of  the  Depart- 
ment  under   the   chairmanship   of   Mr.    Charles   Sykes, 
would  deal  with  questions  affecting  the  manufacture  of 
woollens  and  worsteds  and  would  have  a  free  hand  re- 
garding civilian  production.     Mr.   Forster  claimed  that 
the  scheme  embodied  the  essence  of  partnership  and  was 
an  honest  attempt  to  give  the  trade  the  fullest  measure 
of  control  compatible  with  the  ultimate  responsibility  of 
which  the  Government  could  not  divest  itself.^^ 

In  some  quarters  the  proposed  Board  was  regarded 
with  satisfaction,  but  the  Executive  Committee  of  the 
Wool  Textile  Association  found  it  inadequate.  At  a 
meeting  in  London  this  Committee  requested  that  the 
Board  be  given  control  of  the  entire  industry  from  the 
raw  material  to  the  finished  product,  that  business  men 
representative  of  all  branches  of  the  trade  throughout 

*3  Ibid. 

**Ibid.,  Aug.  II,  p.  231. 


WOOL   AND    WOOLLENS 


123 


the  United  Kingdom  constitute  not  less  than  one-half 
its  membership,  and  that  it  be  nominated  by  the  trade  and 
elect  its  own  chairman.^^  Such  proposals  looked  toward 
a  reduced  representation  of  the  Department  and  of  la- 
bour upon  the  Board,  while  they  greatly  increased  its 
functions. 

For  a  month  negotiations  went  on,  until  Mr.  Forster 
strongly  urged  a  settlement  on  the  ground  that  govern- 
ment supplies  were  low  and  the  situation  serious.^^     At 
length  in  September  the  constitution  and  functions  of  the 
new  "  Board  of  Control  of  the  Woollen  and  Worsted  In- 
dustries "  were  definitely  announced.     The  Board  should 
comprise  not  more  than  eleven  men  nominated  by  the 
Army  Council,  of  whom  at  least  seven  should  be  experts 
responsible  for  placing  orders  for  Government  supplies, 
not  more  than  eleven  representatives  of  employers,  and 
not  more  than  eleven  representatives  of  employes;  the 
chairman  of  the  Board  should  be  the  Director  of  Wool 
Textile  Production.     Certain   functions  were  withheld. 
The  Army  Council  was  still  to  determine  the  amount  of 
raw  wool  to  be  maintained  as  a  reserve ;  the  War  Depart- 
ment was  still  to  make  all  contracts  for  Government  sup- 
plies; the  Army  Contracts  Department  was  still  to  be 
responsible  for  all  dealings  in  raw  wool  up  to  and  includ- 
ing the  making  of  tops.     The  new  Board  was  designed 
particularly  to  take  over  the  work  of  the  existing  Priority 
Committees.     Officials  of  the  War  Department  were  to 

*5  Ibid. 

*«  L.  T.,  Sept.  12,  1917,  p.  3. 


124 


WAR    TIME    CONTROL   OF    INDUSTRY 


ask  its  advice  in  allocating  Government  contracts  and  its 
chairman,  the  Director  of  Wool  Textile  Production,  was 
to  keep  it  informed  monthly  of  the  total  quantity  of  wool 
required  for  such  contracts.     If  at  any  time  there  should 
be,  for  unavoidable  reasons,  a  deficiency  in  the  wool  put 
through    the   machines    for   government   purposes,    the 
Chairman  should  release  as  an  additional  civilian  supply 
a  quantity  sufficient  to  make  up  the  deficiency.     The  Di- 
rector of  Raw  Materials  should  from  time  to  time  furnish 
statistics  as  to  stocks  and  information  as  to  the  exporta- 
tion of  wools,  noils,  tops,  and  yarn.     Thus  informed  and 
fortified,  the  Board  was  henceforth  to  allocate  to  dis- 
tricts, trades,  groups,  and  firms  the  quantity  of  wool  and 
tops  available  for  the  civilian  trade.     In  so  doing  it  was 
to  have  particular  regard  to  securing  the  most  efficient 
execution  of  government  orders  and  to  employing  to  the 
greatest  advantage  the  labour,  machinery,  and  skill  en- 
gaged in  the  industry,  keeping  in  full  use  as  much  ma- 
chinery as  possible.^^     The  scheme  was  much  as  at  first 
outlined,  although  the  provision  regarding  the  release  of 
additional  supplies  was  a  concession.     Agreeing  to  give 
the  new  arrangements  a  trial,  the  trade  promptly  elected 
its  representatives  and  the  Board  at  once  went  to  work. 
A  better  feeling  quickly  prevailed  in  wool  manufacturing 
centres  and  there  was  hope  that,  with  longer  hours  al- 
lowed for  labour  and  a  larger  allocation  of  raw  wool  to 
the  civilian  trade,  business  might  prosper. 

An  increase  in  hours  was  announced  before  the  Board 

*^  Ibid.,  Sept.  20,  p.  3. 


WOOL   AND   WOOLLENS 


125 


was  finally  constituted.  In  August  the  Central  Wool 
Advisory  Committee  made  known  that  from  September 
I  the  weekly  hours  of  work  would  be  increased  from  45 
to  50.  Such  increase  tended  to  allay  discontent  on  the 
part  of  employes,  who  at  a  meeting  of  the  National  As- 
sociation of  the  Unions  of  the  Wool  Textile  Trade  in 
July  had  considered  the  advisability  of  agitating  for  fur- 
ther advances  in  wages  and  had  expressed  distrust  of  the 
Commission  then  sitting  in  Leeds  to  inquire  into  indus- 
trial unrest."*^  The  longer  working  time,  too,  encouraged 
the  belief  that  the  Government  would  issue  wool  and  tops 
in  sufficient  quantities  to  keep  the  machinery  employed 
for  the  full  50  hours  per  week.*^  Merino  tops,  it  be- 
came clear,  would  be  more  plentiful,  although  in  the  case 
of  crossbreds  the  demand  for  military  purposes  might 
still  for  some  time  restrict  the  supply  available  for  civilian 
needs.^® 

Meanwhile  the  Government  continued  and  extended 
its  policy  of  purchasing  the  domestic  and  Colonial  wool 
clips.  Before  summer  it  had  completed  arrangements 
for  the  purchase  of  the  19 17  clip  of  the  United  Kingdom, 
the  prices  being  50  per  cent,  above  the  1914  level.^^ 
Collection  and  payment  this  time  were  far  more  prompt 
than  in  19 16  and  growers  expressed  their  satisfaction. 
In  the  middle  of  July,  the  Chancellor  of  the  Exchequer 
explained  in  Parliament  that  the  Australasian  clip  of 

48  L.  T.,  Jy.  9,  1917,  p.  5;  Aug.  31,  P-  "• 

*9  Ibid.,  Aug.  14,  p.  II. 
BO  Ibid.,  Sept.  25,  p.  13. 
51  Cd.  8447,  p.  14. 


f! 


126 


WAR   TIME   CONTROL   OF   INDUSTRY 


19 1 7  had,  on  the  authority  of  the  War  Cabinet,  been 
bought  for  £40,000,000.^2  This  sum  represented  the 
same  price  as  that  paid  in  the  preceding  year,  a  55  per 
cent,  advance  on  the  prices  of  19 13-14,  the  total  payment 
being  greater  because  the  entire  cHp  of  AustraHa  was  now 
secured.  In  August  it  became  known  that  the  Govern- 
ment had  offered  to  buy  the  South  African  cHp  of  wool 
and  mohair  on  the  same  terms  as  the  Australasian  clips. 
Considerable  opposition  to  the  purchase,  however,  arose 
in  South  Africa  and  the  matter  became  a  somewhat  acri- 
monious political  issue. 

With  the  purchases  of  191 7  and  with  the  establish- 
ment of  the  Board  at  Bradford,  state  control  of  the 
woollen  industry  assumed  pretty  definite  shape.  After 
imposing,  during  a  year  and  a  half  of  the  war,  restric- 
tions merely  upon  the  export  trade,  the  Government  in 
the  spring  of  1916  had  been  forced  to  protect  itself 
against  rising  prices.  At  first  it  attempted  in  its  pur- 
chases to  determine  a  suitable  price  for  the  finished  pro- 
duct by  investigating  costs.  Quickly  confronted  with  the 
varying  price  of  raw  wool,  it  saw  the  necessity  of  stabiliz- 
ing this  price  by  becoming  itself  the  sole  purchaser. 
Thereupon  it  acquired  the  home  clip.  Since,  however, 
this  was  a  relatively  small  factor  in  the  market  and  there 
was  danger  that  the  Colonial  clips  might  not  be  fully 
available  at  suitable  prices  in  any  other  way,  the  Gov- 
ernment took  the  decisive  step  of  purchasing  the  Austral- 
asian output  of   19 16.     It  stipulated   further  that  any 

"  L.  T.,  Oct.  4,  1917,  p.  5. 


MM 


WOOL   AND   WOOLLENS 


127 


Other  wool  imported  should  first  be  offered  for  sale  to 
the    Director    of    Army    Contracts.     Thus    in    practical 
control  of  the  supply  of  raw  wool  in  the  United  King- 
dom, the  Government  was  faced  with  the  problem  of  dis- 
tribution.    Nor  was  it  loath  to  undertake  this,  since,  in 
so  doing,  it  could  effect  essential  economies  in  consump- 
tion.    Acting  through   various   committees,    it  put  into 
force  a  priority  scheme  designed  to  stimulate  manufac- 
ture for  the  military  and  the  export  demand  but  to  dis- 
courage the  making  of  civilian  products  for  home  con- 
sumption.    Practically,  this  involved  a  rationing  of  the 
trade  and  a  limitation  of  the  working  hours  of  the  ma- 
chinery.    Discontent  with  governmental   administration 
and  restrictions  found  expression  in  the  summer  of  1917,  • 
but  much  of  this  was  due  to  a  desire  on  the  part  of  the 
trade  to  acquire  for  itself  the  functions  which  the  state 
had   assumed.     Certain   concessions,   but   not   all   those 
desired,  the  Government  made.     It  persisted  in  retain- 
ing for  itself  and  for  labour  adequate  representation  on 
the  new  Board  which  was  to  take  charge  of  distribution, 
and  it  refused  to  yield  the  ultimate  decision  of  questions 
of  price,  of  the  necessary  reserve  of  wool,  and  of  the 
placing  of  its  own  contracts.     It  continued  its  policy  of 
state  purchase  by  acquiring  the  1917  clips  of  the  United 
Kingdom,  of  Australasia,  and  of  South  Africa.     Its  own 
savings   were   large    in   view   of   what   its   expenditure 
might  have  been  had  the  price  of  raw  wool  been  unre- 
stricted; and  these  economies  were  extended  by  the  in- 
troduction of  substitutes   for  wool  proposed  by  expert 


I 


128 


WAR    TIME    CONTROL   OF    INDUSTRY 


advisors.  A  careful  investigation  of  the  conversion 
costs  of  manufacturers  enabled  it  further  to  reduce  the 
sums  which  it  would  otherwise  have  paid  for  its  pur- 
chases. 

That  such  extensive  governmental  control  has  by  no 
means,  despite  the  complaints  of  the  summer  of  19 17, 
impaired  the  profits  of  the  trade  may  be  gathered  from 
the  remarks  of  Mr.  Charles  Booth,  Chairman  of  the 
Bank  of  Liverpool.  In  his  annual  report  of  July,  19 17, 
he  comments  on  the  general  prosperity  in  which  both  em- 
ployer and  employe  have  shared ;  and,  making  allowance 
for  the  reduction  in  working  hours  per  week  as  well  as 
for  the  increased  cost  of  carrying  stocks  in  consequence 
of  the  high  price  of  raw  material,  he  concludes  that  the 
conditions  of  the  trade  generally  are  sound  and  that  the 
future  is  looked  forward  to  with  a  good  deal  of  con- 
fidence.^^ 

»3  L.  T.,  Jy.  25,  1917,  p.  12. 


HIDES  AND  LEATHER 

In  respect  to  clothing,  boots,  after  woollens,  are  the 
army's  chief  requirement.  For  them  leather  is  needed, 
and  not  only  for  them  but  for  harness,  saddlery,  and 
equipment.  As  in  the  case  of  coal,  munitions,  and 
woollens,  the  Government,  therefore,  became  an  exten- 
sive purchaser  and  had  an  immediate  interest  in  the  sup- 
plies available  as  well  as  in  the  price  at  which  they  were  to 
be  had.  Although  the  analogy  with  woollens  is  closest, 
there  were  between  the  two  trades  differences  in  condi- 
tions, which  became  manifest  m  the  Government's  at- 
titude toward  them.  In  particular  the  United  Kingdom 
contained  within  its  borders  a  greater  relative  supply  of 
hides  suitable  for  sole  leather  than  it  did  of  raw  wool, 
and,  on  the  other  hand,  a  smaller  relative  supply  of  hides 
suitable  for  uppers. 

The  distinction  between  these  two  kinds  of  hides  was 
operative  from  the  outset.^  Heavy  hides  were  needed 
not  only  for  sole  leather  but  for  harness,  saddlery,  and 
equipment;  and  for  such  accoutrement  the  home  supply 
was  primarily  set  aside.  The  surplus  remaining  after 
accoutrement  leather  had  been  provided  was  available 
for  sole  leather.     Further  supplies  of  the  latter  had  to  be 

1  The  information  regarding  hides  and  leather  contained  in  the 
following  pages  is,  where  not  otherwise  stated,  drawn  from  a 
Memorandum  on  War  Office  Contracts  by  N.  F.  Wintour,  Director 
of  Army  Contracts.    Cd.  8447,  Je.,  1917,  pp.  17-20. 

129 


130 


WAR    TIME    CONTROL   OF    INDUSTRY 


got  by  importing  hides.  At  the  beginning  of  the  war, 
when  the  demand  was  unusually  great,  both  finished 
leather  and  heavy  hides  were  for  a  time  imported  in 
large  quantities  from  Canada  and  the  United  States.  As 
soon,  however,  as  the  tanning  industry  got  adjusted,  it 
assumed  more  and  more  the  task  of  finishing  all  heavy 
supplies  and  the  situation  in  this  respect  became  analo- 
gous to  that  prevailing  in  the  woollen  trade. 

In  January,   1915,  the  Department  of  Army  Supplies 
made  its  first  extensive  arrangement  with  the  sole  leather 
tanners.     The  United  Tanners'  Federation  undertook  to 
supply  the  amount  of  heavy  sole  leather  required  by  the 
Department,    prices    to    be    fixed    throughout    definite 
periods.     The  initial  price  was  considerably  below  that 
prevailing  at  the  moment.     How  much  was  gained  by 
such  action  speedily  became  apparent;  for  the  prices  of 
equipment  and   saddlery  leather  continued   to  advance. 
Tanners  could  point  in  extenuation  of  their  prices  for 
leather  of  the  latter  sort  to  a  rise  in  the  cost  of  hides  from 
7  d.  per  pound  before  the  war  to  14  d.  in  the  middle  of 
191 5.     The  Government  thereupon  tried  again  the  policy 
of  arranging  prices  with  the  tanners,  this  time  for  equip- 
ment and  saddlery  leather,  leaving  them  to  deal  with  the 
butchers.     Again  the  device  was  effective,  and  the  price 
of  hides  immediately  fell  to  io>^  d.  per  pound.     A  policy 
of  attempting  to  control  prices  of  finished  products  with- 
out similar  control  over  the  price  of  raw  materials  suc- 
ceeded here  as  it  had  not  with  woollens  and  worsteds,^ 
2  Cf .,  above,  p.  108. 


HIDES   AND   LEATHER 


131 


because  the  manufacturers  were  in  a  position  to  dominate 
those  who  brought  supplies  to  them.  British  butchers 
had  no  such  market  for  their  hides  in  the  summer  of 
19 1 5  as  wool  producers  had  for  their  wool  in  the  spring 
of  19 16.  The  Department  was  obliged,  therefore,  to 
deal  only  with  the  finishers  of  hides  and  could  for  a  time 
ignore  the  raw  material. 

This  easy  control  lasted  for  less  than  a  year.  Early 
in  19 16  the  demands  for  boots  greatly  increased.  In 
addition  to  the  growing  needs  of  the  British  army,  Rus- 
sia asked  for  7,000,000  pairs  of  boots  and  6,000  tons  of 
sole  leather,  Italy,  Belgium,  and  Serbia  for  1,500,000, 
150,000,  and  60,000  pairs  of  boots  respectively.  Since 
the  financial  and  shipping  situation  made  it  imperative  that 
these  needs  be  supplied  in  Great  Britain  if  possible,  meas- 
ures were  at  once  taken  to  increase  the  production  of 
leather  and  to  maintain  control  of  prices. 

Thus  far  only  the  heavier  classes  of  sole  leather  had 
been  taken  for  army  boots,  the  lighter  weights  being 
sold  to  the  civilian  trade.  At  the  end  of  May,  19 16,  ten 
lighter  varieties  were  requisitioned  by  the  Army  Council 
and  the  list  was  extended  by  additional  orders  in  June, 
August,  September,  and  December,  191 6,  and  in  Jan- 
uary, February,  and  March,  1917.^  In  the  middle  of 
19 1 6,  Australian  leathers,  until  then  barred,  were  ad- 
mitted to  military  uses  and  rose  20  per  cent,  in  price  as 
a  consequence.* 

s  B.  T.  J.,  Je.  I,  1916,  p.  589;  D.  R.  M.,  3rd  ed.,  p.  170. 
*L.  E.,  Feb.  17,  191 7,  p.  316. 


132 


WAR    TIME    CONTROL    OF    INDUSTRY 


HIDES    AND    LEATHER 


133 


With  army  demands  thus  increasing,  the  price  of  hides 
showed  a  strong  tendency  to  rise.  The  Government, 
therefore,  in  the  first  half  of  19 16  was  forced  to  do  what 
it  had  avoided  a  year  earHer.  It  entered  into  negotia- 
tions for  fixing  the  market  price  of  heavy  hides  and  se- 
cured the  advantageous  one  of  10  d.  per  pound.  At  prac- 
tically this  figure  the  price  has  since  remained,  although 
in  the  world  market  there  was  a  marked  advance  during 
the  latter  half  of  19 16.  In  the  Argentine  hides  rose  to 
21  d.  and  in  an  uncontrolled  market  native  hides  would 
probably  have  reached  1 5  d.  Inasmuch  as  the  home  pro- 
duction is  about  2,500,000  hides  yearly,  each  weighing 
some  60  pounds,  £3,000,000  less  a  year  was  paid  for 
hides  than  would  have  been  paid  had  the  Government 
not  intervened. 

Now  that  all  native  hides  suitable  for  army  boots 
were  to  be  at  the  disposal  of  the  tanners  who  filled  con- 
tracts for  the  Government  or  the  Allies,  a  new  fixing  of 
the  prices  for  leather  was  opportune.  By  the  summer 
of  1 91 6  the  Government  had  learned  considerable  about 
the  determination  of  costings,  and  resolved  to  apply  its 
knowledge  to  the  processes  involved  in  tanning.  The 
task  was  not  simple,  since  the  value  of  leather  varies  from 
tannage  to  tannage  and  prices  had  to  be  fixed  for  some 
thousands  of  varieties.  A  Committee  composed  of  three 
tanners,  a  leather  merchant,  and  two  boot  manufacturers 
undertook  to  assess  the  comparative  value  of  each  tan- 
nage on  the  basis  of  prices  prevailing  at  the  beginning  of 
the  period  of  contract.     At  the  same  time  chartered  ac- 


/ 


/ 


countants  of  the  Department  investigated,  in  the  case  of 
seven  representative  tanners,  the  cost  of  the  production 
of  sole  leather  and  the  relation  between  tanners'  pre-war 
profits  and  the  war  profits  of  the  moment.     From  the 
knowledge  thus  acquired  prices  presumably  fair  for  the 
tanner  and  for  the  country  were  determined.     They  were 
relatively  lower  than  prices  ruling  in  the  civilian  trade, 
and,  when  in  November,  19 16,  leather  of  certain  lighter 
weights  was  released,  the  prices  commanded  were  in  many 
cases  a  shilling  a  pound  higher  than  the  prices  now  al- 
lowed.    Perhaps  6  d.  a  pound  would  represent  the  dif- 
ference between  market  prices  at  the  end  of  the  year 
and  the  prices  now  arranged  between  the  Government  and 
the  tanners.     Tanners'  profits  were  henceforth  slightly 
above  the  pre-war  standard,  but  considerably  below  what 
they  had  heretofore  been  during  the  war.     Adjustments 
at  quarterly  intervals  have  since  provided  for  fluctuation 
in  the  price  of  raw  materials. 

So  far  as  the  raw  materials  were  domestic  hides,  there 
was  little  variation  in  price.  But  the  foreign  supply  had 
to  be  drawn  upon  and  here  the  Government  did  what  it 
could  to  help  the  tanners  and  indirectly  protect  itself. 
Pushing  aside  the  middleman,  it  imported  from  France 
and  Italy  all  heavy  hides  suitable  for  making  sole  leather, 
which  those  countries  could  spare.  Some  £50,000,  rep- 
resenting the  importer's  profits,  were  thus  saved.  British 
Meat  Companies  in  the  Argentine,  which  were  supplying 
the  Government  with  meat,  were  induced  to  grant  the 
United  Tanners'  Association  as  favourable  rates  as  pos- 


/ 


134 


WAR   TIME   CONTROL   OF    INDUSTRY 


sible.  Finally,  to  eliminate  speculation  in  imported 
hides  used  for  military  leather,  an  order  was  issued  on 
February  2,  19 17,  forbidding  an  increase  of  more  than  i 
per  cent,  in  the  price  of  such  hides  as  they  pass  from  the 
importer  to  the  tanner.^  Measures  of  this  kind  did 
something  to  modify  the  prices  of  imported  hides,  al- 
though in  the  spring  of  1917  those  from  South  America 
and  elsewhere  cost  about  twice  as  much  as  did  English 
hides.^ 

While  sole  leather  for  army  requirements  was  got  in 
this  manner,  the  securing  of  upper  leather  presented  a 
different  problem.  Of  this  the  home  supply  was  en- 
tirely inadequate  and  had  before  the  war  been  much  sup- 
plemented by  supplies  from  enemy  countries.  Indeed, 
Germany  and  Austria  in  getting  their  raw  material  had 
captured  an  industry  formerly  belonging  to  Great  Britain. 
For  the  reservoir  upon  which  they  drew  was  East  India 
kips.  At  the  outbreak  of  the  war,  therefore,  the  De- 
partment turned  to  the  same  source,  buying  East  India 
kips  and  distributing  them  to  manufacturers.  Up  to  the 
end  of  19 1 5  army  requirements  were  easily  met  and  it 
turned  out  that  the  leather  produced  from  the  kips  cost 
only  about  12  d.  per  foot,  whereas  corresponding  leather 
from  British  hides  cost  21  d. 

With  the  demands  of  Allied  armies  added  to  those  of 
the  British  army  early  in  1916  the  situation  changed. 
Since  the  new  demand  revealed  insufficient  supplies,  there 

»  D.  R.  M.,  3rd  ed.,  p.  187. 

«  Amer.  Commerce  Report,  May  8,  1917. 


HIDES    AND   LEATHER 


135 


was  room  for  speculation  in  an  uncontrolled  market. 
Indications  of  it  were  afforded  by  the  rising  price  of  kips, 
and  it  bade  fair  to  increase.  The  Government  there- 
upon acted  as  it  was  soon  to  act  in  the  case  of  wool.  To 
insure  adequate  supplies  and  to  protect  itself  against 
speculative  prices,  it  purchased  with  the  assistance  of  the 
Government  of  India  all  kips  suitable  for  its  purposes. 
Such  were  East  India  tanned  kips  of  6  pounds  and  up- 
wards and  Bangalore  tanned  kips  of  7  pounds  and  up- 
wards. For  the  entire  stock  the  price  paid  was  that  of 
the  market  of  May  6-1 1,  1916. 

Difficulties  soon  arose  from  the  heavy  civilian  demand 
for  those  kips  which  the  Department  had  rejected  as  un- 
suitable. Prices  offered  for  them  were  higher  than  the 
prices  which  the  Government  was  paying  for  its  superior 
supplies  and  the  tanners  in  India  naturally  preferred  to 
work  upon  them.  The  Government,  therefore,  saw  it- 
self forced  to  purchase  unsuitable  as  well  as  suitable  kips, 
in  much  the  same  way  as  it  had  somewhat  unwillingly 
purchased  merino  along  with  crossbred  wool  from  Aus- 
tralasia. Its  monopoly  of  the  supply  of  the  raw  material 
for  upper  leather  was  thus  practically  established. 

The  methods  employed  in  acquiring  and  allocating  the 
kips  are  not  unlike  those  which  prevail  in  the  corre- 
sponding administration  of  the  imported  wool  supply. 
The  Indian  Government  acts  as  intermediary.  It  buys 
through  selected  merchants,  who  purchase  at  fixed  prices 
and  sell  at  standard  rates,  in  short,  act  as  commission 
agents.     The   Admiralty    furnishes    requisitioned    ships. 


136 


WAR    TIME   CONTROL   OF   INDUSTRY 


On  reaching  Great  Britain  the  kips  are  handled  by  the 
estabhshed  importing  houses,  which  are  paid  a  commis- 
sion of  Yz  per  cent,  on  cost.  The  Department's  inspec- 
tors select  bales  to  be  forwarded  to  curriers,  who  in  turn 
are  employed  at  commission  rates  to  carry  out  the  De- 
partment's specifications  and  deliver  their  product  to  War 
Office  contractors.  About  200  firms  of  curriers,  prac- 
tically all  suitable  ones  in  Great  Britain,  receive  Govern- 
ment work  and  the  number  of  kips  coming  forward  on 
government  account  each  month  is  about  200,000.  They 
constitute  about  75  per  cent,  of  the  entire  supply  and 
cost  about  £300,000. 

British  hides  for  upper  leather,  which  constitute  the 
remainder  of  the  supply,  are  also  controlled  and  utilized 
by  the  Department  but  on  less  advantageous  financial 
terms.  Before  the  war  they  sold  at  15  d.  per  foot,  kips 
at  10  d.  The  prices  at  which  the  two  have  been  taken 
over  work  out  at  21  d.  and  12  d.  respectively,  advances 
of  40  per  cent,  and  20  per  cent.  The  Government's 
saving  of  9  d.  per  foot,  applicable  in  1916  to  20  million 
feet  of  upper  leather,  was  £1,000,000.  Probably,  in 
19 1 7,  twice  as  many  East  India  kips  will  be  in  question 
and  the  saving  will  be  twice  as  great. 

In  contrast  with  these  economies  of  the  War  Office  is 
the  expenditure  of  the  civilian  trade.  Before  kip  leather 
came  under  control,  boot  manufacturers  paid  16  d.  for  it, 
so  great  was  the  demand.  Since  then  unsuitable  kips 
have  been  sold  by  the  Government  to  tanners  and  the 
profit  credited  to  Army  Funds.     For  the  Department  has 


HIDES   AND   LEATHER 


137 


the  margin  between  the  12  d.  which  it  pays  and  the 
prevailing  market  price.  The  latter  has  steadily  ad- 
vanced and  in  the  spring  of  19 17  glace  kid  was  at  three 
times  its  pre-war  price. "^ 

As  for  sole  leather  the  price  demanded  for  such  civilian 
supplies  as  are  available  is  uncontrolled.  During  19 16 
miscellaneous  hides  advanced  50-60  per  cent.,  South 
American  80-90  per  cent.  In  part  this  was  due  to  United 
States  buying,  home  requirements  there  being  large  and 
exports  having  enormously  increased.^  By  the  spring  of 
19 1 7  the  civilian  population  of  the  United  Kingdom  was 
being  more  and  more  neglected,  while  fully  90  per  cent, 
of  the  output  of  English  tanyards  was  controlled  by  the 
Government  for  military  purposes.^  Even  repairers 
were  at  their  wits'  end  for  supplies  and  the  price  for 
soling  boots  had  advanced  from  6  s.  6  d.  to  9  s.  6  d. 
Two  courses  were  advocated  as  likely  to  bring  relief. 
The  Government  was  urged  to  release  stores,  which  were 
said  to  be  considerable  in  the  country,  and  a  standard 
boot  was  proposed. ^^ 

Yielding  to  the  first  request,  the  Government  on  Au- 
gust 31,  19 1 7,  released  for  civilian  use  various  sole  and 
upper  leathers  made  from  imported  hides.  The  order  was 
a  partial  relaxation  of  an  earlier  one  of  March  by  which 
the  Government  had  appropriated  all  sole  or  upper 
leathers  of  certain  descriptions  made  from  British  or  im- 

^  Amer.  Commerce  Reports,  May  8,  1917. 

8L.  E.,  Feb.  17,  1917,  p.  316. 

»  Amer.  Com.  Reports,  May  8,  1917. 

10  L.  E.,  Aug.  4,  1917,  p.  195;  Aug.  II,  p.  232;  L.  T.,  Oct.  12,  p.  3. 


138 


WAR   TIME   CONTROL   OF   INDUSTRY 


ported  hides  then  in  stock  in  the  United  Kingdom.  In 
the  case  of  the  leathers  released,  the  Government  stipu- 
ulated  that,  in  as  much  as  they  had  been  bought  below 
market  prices,  tanners  should  sell  them  to  the  civilian 
trade  at  not  more  than  2  d.  in  excess  of  prices  paid  by  the 
War  Department.  No  one  might  purchase  more  than 
500  bends  or  the  equivalent  in  butts.  To  relieve  the 
pressing  needs  of  repairers,  half  of  the  purchase,  it  was 
stipulated,  must  be  used  for  repairs.^^ 

Soon  after  this,  provision  was  made  for  the  manufac- 
ture of  a  standard  boot.  Makers  of  it  were  to  get  leather 
at  20  per  cent,  below  market  prices  and  on  the  other  hand 
they  were  to  be  content  with  a  profit  of  5  per  cent.  Al- 
though standard  boots  were  not  likely  to  reach  London 
before  19 18,  it  was  clear  that  their  advent  would  be  a 
boon  to  the  poorer  classes  who  were  paying  absurd  prices 
for  worthless  footwear.^^ 

Since  the  Government  during  1916  had  become  more 
and  more  involved  in  the  administration  of  the  leather 
industry  and  since  at  the  end  of  the  year  the  question  of 
supplies  had  become  more  urgent  owing  to  heavy  de- 
mands of  the  Allies  and  the  shortage  of  shipping,  a 
Central  Leather  Supplies  Advisory  Committee  was  set 
up.  To  this  and  to  its  subsidiaries  the  Department  hence- 
forth communicated  all  pertinent  information  at  hand  — 
the  supplies  of  hides,  leather,  and  tanning  material  in  the 
United  Kingdom  and  under  Allied  control  on  the  one 

11 L  T.,  Aug.  22,  1917,  p.  3. 
^2  Ibid.,  Oct.  12,  p.  3. 


HIDES    AND   LEATHER 


139 


hand,  the  needs  of  the  army,  of  the  Allies,  and  of  the 
civil  population  on  the  other.     Thus  informed  the  Com- 
mittee can  give  advice  on  questions  which  arise.     The 
Government,  on  its  part,  has  tried  to  increase  the  Com- 
mittee's responsibility  and  in  the  opinion  of  the  Director 
of  Army  Contracts  the  policy  has  been  highly  successful. 
"  The  smoothness  with  which  the  elaborate  organization 
of  the  leather  trades  has  worked,"  he  remarks,  "  and  the 
ready  co-operation  which  has  rendered  possible  the  large 
changes  in  methods  of  trading  and  production  afford 
ample  justification  for  this  policy."     Certainly  there  has 
been  far  less  friction  than  arose  between  the  Government 
and  the  woollen  trade.     This  may  be  due  to  the  less  com- 
prehensive interference  of  the  state  in  the  leather  in- 
dustry.    Only  one  branch  of  the  raw  material  is  under 
that  complete  governmental  control  which  implies  pur- 
chase and   allocation,   viz.,   upper  leather;   sole   leather 
is  controlled  only  in  so  far  as  domestic  and  imported 
hides  are  subject  to  pre-emption  on  the  part  of  the  Gov- 
ernment.    At    times    the    Government    releases    certain 
hides  which  it  has  held  back  and  stipulates  under  what 
conditions  they  may  be  sold.     Other  hides  for  civilian 
use  are  sold  in  an  uncontrolled  market. 


SHIPPING 

The  Government's  attitude  toward  the  shipping  in- 
dustry is  significant  not  only  as  an  essay  in  state  con- 
trol, but  also  as  a  factor  in  the  food  situation.  Most 
consumers  of  food  in  the  United  Kingdom  came  to  feel 
that  they  were  paying  too  high  prices  largely  because  the 
Government  did  not  control  certain  producers,  middle- 
men, and  shippers.  And  the  greatest  offenders  were  the 
shippers. 

At  the  outbreak  of  war  the  interest  of  shipowners  cen- 
tred in  two  questions  —  what  ships  would  the  Govern- 
ment requisition,  and  what  would  be  done  for  the  pro- 
tection of  ships  not  requisitioned.  The  answer  came  at 
once.  On  August  3,  19 14,  a  Royal  Proclamation  declared 
that  a  national  emergency  demanded  the  immediate  em- 
ployment of  a  large  number  of  vessels  for  use  as  trans- 
ports and  auxiliaries.  Since  there  could  be  no  delay,  the 
Lords  Commissioners  of  the  Admiralty  were  to  requisi- 
tion immediately  any  vessel  within  the  waters  adjacent  to 
Great  Britain.  Owners  might  file  their  claims  with  the 
Admiralty;  and  in  case  the  Admiralty  and  the  owner 
failed  to  agree  as  to  the  proper  compensation,  the  Presi- 
dent of  a  Board  of  Arbitration  was  directed  to  choose 
two  members  of  his  Board  as  arbitrators.     If  the  two 

could  not  agree,  reference  should  be  had  to  the  President 

140 


SHIPPING 


141 


as  a  third  member.  This  Board  of  Arbitration  was  to  be 
constituted  in  seven  panels,  comprising  Government  nom- 
inees, shipowners,  bankers,  underwriters,  marine  insur- 
ance companies,  insurance  brokers,  and  average  adjust- 
ers.^ A  month  later  its  functions  were  increased.  The 
President  was  empowered  to  authorize  from  time  to  time 
all  or  a  part  of  the  members  of  a  panel  to  consider  ap- 
proximate monthly  rates  of  hire  for  vessels  of  different 
classes.  Arbitrators  from  the  Board  might  have  regard 
to  such  rates  but  need  not  be  bound  by  them.^  As  a 
result  of  these  arrangements  there  were  gradually  drawn 
up  so-called  "  blue-book  "  rates  for  requisitioned  ships, 
rates  markedly  below  those  soon  prevailing  in  the  market. 
They  were  revised  in  March,  191 5,  but  since  then  have 
been  unchanged.^  The  rate  in  the  summer  of  19 17  was 
1 1  s.  per  gross  ton  per  month  for  "  tramp  "  steamers, 
somewhat  more  for  "  cargo  "  liners  according  to  their 
speed.^ 

The  number  of  ships  speedily  requisitioned  by  the 
Government  was  about  20  per  cent,  of  the  total  mer- 
cantile tonnage  of  Great  Britain.^  In  June,  1914,  this 
total  for  vessels  of  100  tons  and  over  was  20,523,706 
gross  tons,  and  the  ships  of  such  tonnage  numbered 
10,124.  If  only  vessels  of  1600  tons  and  over  be  con- 
sidered, the  total  tonnage  was  16,900,000  gross  tons  and 

1 B.  T.  J.,  Aug.  20,  1914,  p.  481  . 
2  Ibid.,  Sept.  3,  1914,  p.  608. 
8Cd.  8483,  p.  II. 
*B.  T.  J.,  Je.  I,  igi7,  p.  219. 
5  P.  D.  C,  1915.  LXIX,  925. 


y> 


142  WAR   TIxME    CONTROL    OF    INDUSTRY 

their  number  was  3900/'  The  20  per  cent,  requisitioned 
by  the  Government  comprised  about  1500  ships,  many  of 
them  of  the  larger  sort.  The  commandeering  fell  at 
first  unequally  upon  firms  of  shippers,  some  being  obliged 
to  put  a  large  proportion  of  their  vessels  at  the  disposal 
of  the  state  while  others  were  able  to  retain  most  of  their 
ships  free. 

For  vessels  not  requisitioned  the  Government  at  the 
outbreak  of  war  prepared  and  put  into  force  a  scheme 
of  war  insurance.     Ordinary  policies  had  protected  ship- 
owners only  against  the  usual  perils  of  the  sea,  not  against 
King's  enemy  risks.     Nor  had  the  state  heretofore  been 
willing,  although  urged,  to  undertake  insurance  involving 
risks  of  the  latter  sort.     Shipowners  had,  therefore,  been 
forced  to  protect  themselves  in  this  matter  by  Protecting 
and    Indemnity    Associations.     The    Government's   new 
proposal,  drafted  by  an  expert  sub-committee  of  the  Im- 
perial Defence  Committee,  was  to  assume  80  per  cent,  of 
the  risk  borne  by  the  Protecting  and  Indemnity  Associa- 
tions, receiving  in  return  80  per  cent,  of  the  premiums 
paid  in.     The  remaining  20  per  cent,  of  the  risk  was  to 
rest  upon  the  Associations,  which  in  consequence  were 
to  receive  the  corresponding  20  per  cent,  of  the  premiums. 
The  rate  henceforth  was  to  be  a  fiat  one,  administered 
by  a  state  bureau  for  insuring  cargoes  and  by  an  advisory 
board.     Despite  this  seemingly  favourable  arrangement, 
so  considerable  were  the  losses  suffered  that  within  the 
first  six  months  shipowners  were  obliged  to  pay  in  war 
«  B.  T.  J.,  Je.  I,  1917,  p.  219. 


SHIPPING 


143 


insurance,  it  was  estimated,  3  per  cent,  on  ships  valued  at 
£120,000,000.  One  firm,  managing  a  fleet  of  eighteen 
tramp  steamers,  paid  £14,000  in  premiums  to  cover 
King's  enemy  risk."^ 

For  a  little  time  after  the  outbreak  of  the  war  freights 
rose  only  slightly,  merely  enough  to  reflect  the  added  cost 
of  war  insurance.  But  by  November,  1914,  an  increase 
began  which  continued  for  some  four  months.  Several 
factors  contributed,  the  greatest  being  the  decline  in  avail- 
able tonnage.  One-fifth  of  the  mercantile  tonnage  of 
Great  Britain  had  been  diverted  to  the  needs  of  the  navy 
and  army.  Many  vessels  were  shut  up  in  the  ports  of 
the  Black  Sea  and  the  Baltic,  and  in  enemy's  harbours. 
A  half  million  tons  of  shipping  had  been  sunk.  Of  the 
w^orld's  tonnage,  the  14  per  cent,  represented  by  German 
and  Austrian  ships  was  in  part  idle  in  neutral  ports.  The 
production  of  British  shipyards,  far  from  meeting  these 
losses,  itself  decreased.  Labour  was  hard  to  get  and 
naval  requirements  were  receiving  first  attention.  The 
congestion  of  freight  at  the  docks,  upon  the  railways,  and 
in  warehouses  was  a  telling  influence,  due  also  to  scarcity 
of  labour  and  to  the  military  needs  of  the  Government. 
On  January  29,  191 5,  the  London  docks  were  so  con- 
gested that  forty  vessels  lay  at  Gravesend  waiting  to  dis- 
charge their  cargoes.  Since  French  and  Italian  ports 
were  in  a  like  condition,  the  length  of  a  voyage  was  four 
or  five  times  as  long  as  under  normal  conditions.     One 

^  W.   H.   Renwick,   Sea   Freights   and  the   Cost   of   Food.    Nine- 
teenth Century  and  After,  Mar.,  1915. 


144 


WAR   TIME   CONTROL   OF   INDUSTRY 


expert  estimated  that  the  loss  of  effective  tonnage  through 
congestion  of  traffic  was  lo  per  cent.  For  these  reasons 
there  arose  early  in  19 15  a  very  real  shortage  in  shipping 
facilities,  only  slightly  remedied  by  the  appropriation  of 
German  ships. 

Added  to  the  shortage  was  the  high  cost  of  labour  at 
sea.  Some  30,000  alien  sailors,  formerly  employed  on 
merchant  ships,  were  withdrawn,  while  men  of  the  Royal 
Naval  Reserve  went  for  service  with  the  fleet.  Whereas 
wages  in  July,  1914,  were  £5  10  s.  a  month,  early  in  1915 
£7  IDS.  was  asked  and  paid  on  tramp  steamers.® 

Freight  rates,  therefore,  by  March,  19 15,  would  natu- 
rally have  risen  to  some  extent;  but  whether  the  extent 
of  the  actual  advance  was  warranted  seems  open  to  ques- 
tion. It  is  shown  in  the  accompanying  schedule  which 
embodies  later  increases  as  well.^ 

The  Labour  party,  considering  the  freights  of  early 
1915  unwarranted  and  responsible  for  the  higher  cost  of 
living,  urged  the  Government  to  commandeer  the  entire 
mercantile  marine  and  fix  maximum  rates.  But  the  dif- 
ficulties of  administering  twenty  million  gross  tons  of 
shipping,  engaged  to  a  considerable  extent  in  neutral 
trade,  and  the  possibility  of  having  to  deal  with  seamen's 
wages  acted  as  deterrents.  Mr.  Asquith,  on  February 
II,  argued  that  the  cost  of  wheat  in  the  New  York  mar- 
ket, not  the  shipping  rates,  was  responsible  for  the  high 
price  of  wheat  in  England.     Of  the  advance  from  36  s. 

8  Ibid. ;  Cd.  8483,  p.  10. 

9  Cd.   8483,    p.   9. 


i 

o 

o 

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SHIPPING 


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X.'^^'oi-ii-iVOiOH-it-i  -^ 

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145 


146  WAR   TIME   CONTROL   OF    INDUSTRY 

3  d.  to  57  s.  II  d.  per  quarter  (8  bushels)  for  Number  i 
Manitoba  (the  standard),  18  s.  2d.,  he  said,  was  the  in- 
crease in  New  York,  only  3  s.  6  d.  the  increased  freight. 
In  the  case  of  Argentine  wheat,  the  shipper,  he  admitted, 
got  a  larger  proportion  of  the  high  price,  but  this  wheat 
came  on  the  market  only  after  the  advance  had  taken 
place.  ^^ 

The  Committee  which  at  the  end  of  19 16  investigated 
food  prices  and,  incidentally,  shipping  rates,  formulated 
a  rule  to  determine  whether  increased  shipping  freights 
were  borne  by  producer  or  consumer.  If  the  commodity 
transported  be  such  that  an  advance  in  its  price  would 
have  little  effect  on  the  demand,  while  a  smaller  remu- 
neration to  the  producer  would  decrease  the  supply,  the 
consumer  is  likely  to  pay  any  higher  intermediate  charges 
like  freights.  The  consumer,  the  Committee  concluded, 
did  in  this  way  pay  from  8  s.  to  10  s.  per  quarter  on  North 
American  wheat  imported  during  the  cereal  year  191 5- 
16,  when  these  conditions  were  fulfilled.  If,  on  the  other 
hand,  the  demand  is  more  elastic  than  the  supply,  the  in- 
termediate charges  are  likely  to  be  paid  by  the  producer. 
Such  was  probably  the  case  in  general  with  wheat  from 
Argentina,  since  this  sold  in  England  only  when  its 
price  did  not  rise  above  that  of  North  American  wheat. 
Until  its  price  reached  such  a  point,  the  producer  paid  any 
advances  in  freight  rates  which  might  accrue.  ^^  When 
Mr.  Asquith  spoke  in  February,  191 5,  freight  rates  were 

10  p.  D.  C,  1915,  LXIX,  764. 
"  Cd.  8483,  p.  10. 


SHIPPING 


147 


responsible  for  only  one-fifth  of  the  rise  m  the  price  of 
wheat  which  had  then  taken  place  in  England.  But  the 
one-fifth  was  none  the  less  paid  by  the  consumer  and  was 
destined  to  increase  in  amount  until  the  Government  was 
forced  to  take  cognizance  of  the  situation. 

What  the  Government  did  very  soon  give  attention  to 
were  the  insulated  or  refrigerated  spaces  in  British  steam- 
ships.    Upon  these  depended  the  meat  supply  of  the  Al- 
hed  forces  and  it  was  not  possible  to  allow  an  unrestricted 
advance  in  freights  or  in  the  prices  of  meat.^^     Happily 
it  proved  possible  to  make  with  the  owners  satisfactory 
arrangements,  which  avoided  the  exercise  of  compulsory 
powers.     On  April  13,  1915.  accordingly,  an  Order  in 
Council  requisitioned  all  insulated  spaces  in  British  steam- 
ships trading  with  Australia  and  New  Zealand.     Some 
two  weeks  later  a  similar  order  was  issued  regarding 
steamers  trading  with  the  Argentine  and  Uruguay.     On 
December  22  all  insulated  spaces  in  British  vessels  were 
taken  over.^^     xhe  tonnage  involved  was  considerable, 
450,000  tons  of  meat  coming  each  year  from  the  River 
Plate  and  a  still  larger  amount  from  Australasia.'^     The 
scheme  worked  well.     The  ocean  carriage  of  frozen  meat 
from  the  Argentine  did  not  henceforth  cost  more  than 
I  d.    a  pound,   that    from   Australasia   not   more   than 

12  Cf.,  below,  p.  184.  ,,  , 

WB.  T.  J..  Apr.  22.  1915,  P-  221;  May  6,  p.  37o;  May  27,  p.  602; 

Oct.  21,  p.  171 ;  Dec.  23,  p.  809. 

14  p.  D.  C,  1916,  LXXXVI,  499- 

15  L  T.,  Jy.  26,  1917,  p.  8    Mr.  Runciman  in  the  Commons. 


148 


WAR   TIME   CONTROL   OF   INDUSTRY 


At  the  end  of  191 5  the  poHcy  of  requisitioning  space  to 
insure  the  food  supply  was  extended.  Freight  rates, 
although  changing  little  between  April  and  August,  rose 
sharply  in  the  autumn,  and  the  price  of  wheat  mani- 
fested a  similar  tendency.^®  The  Government,  therefore, 
appointed  a  Requisitioning  (Carriage  of  Foodstuffs) 
Committee.  It  was  composed  of  experts  in  shipping 
matters,  men  who  were  also  advising  the  Transport  De- 
partment of  the  Admiralty.  To  it  was  assigned  the  task 
of  securing  sufficient  tonnage  for  the  carriage  of  food- 
stuffs and  of  preventing  freights  on  them  from  rising 
to  prohibitive  levels.  It  was  empowered  to  divert  or  to 
requisition  shipping  adequate  for  the  provision  of  such 
monthly  supplies  as  the  cabinet  Committee  on  Food  Sup- 
plies might  prescribe. ^^ 

At  once  the  Committee  began  to  requisition  liners  and 
cargo  steamers,  requiring  them  to  devote  from  50  to  75 
per  cent,  of  their  space  to  the  carriage  of  foodstuffs. 
Since  vessels  so  ordered  could  not  go  into  any  other  trade, 
the  action  was  effective.  The  cost  of  bringing  wheat 
across  the  Atlantic  was  reduced  from  18  s.  a  quarter  to 
7  s.  or  8  s.  by  the  autumn  of  1916.^^  Food  prices  sim- 
ultaneously declined  and  thenceforth  wheat,  imported  for 
the  most  part  by  the  Government,  paid  freights  which 
represented  only  about  J4  d.  on  the  quartern  (4  pound) 
loaf.     Since  sugar  already  paid  a  stipulated  rate  of  Yi  d. 

^6  Cf.,  above,  p.  145 ;  below,  p.  203. 

17  B.  T.  J.,  Nov.  IT,  1915,  pp.  zyz-7S. 

18  P.  D.  C,  1916,  LXXXVI,  505. 


SHIPPING 


149 


\ 


\ 


\ 


a  pound,  it  could  now  be  said  that  three  important  arti- 
cles of  food  were  no  longer  exposed  to  the  payment  of 
excessive  ocean  freight  rates.^^ 

At  the  same  time  that  the  Requisitioning  Committee 
acquired  its  power,  another  Order  in  Council  of  Novem- 
ber 10,  191 5,  further  regulated  the  employment  of  British 
shipping.  Although  there  was  no  intention  of  disturb- 
ing existing  business  arrangements,  home  needs,  it  was 
felt,  had  first  claim.  Henceforth  every  vessel  exceeding 
500  tons  gross  tonnage  and  trafficking  between  foreign 
ports  must  get  a  licence.  Later  the  order  was  extended 
so  that  vessels  of  this  tonnage  had  to  be  licenced  to  make 
any  voyage  whatever.  More  and  more  the  movements 
of  British  steamships  were  being  interfered  with,  pre- 
cisely as  their  cargo  spaces  had  been  taken  over.  In 
February,  19 16,  several  vessels  were  even  released  from 
Government  service  on  condition  that  they  load  wheat 
in  North  America  for  Great  Britain.^^ 

A  final  effort  of  November,  1915,  to  relieve  the  ship- 
ping situation  referred  to  the  docks.  A  Port  and  Transit 
Committee  was  appointed  to  inquire  into  difficulties  and 
regulate  traffic  there,  to  co-ordinate  requirements  of  all 
conflicting  interests,  and  to  decide  questions  which  might 
be  referred  to  them,  giving  orders  in  such  cases  to  exec- 
utive bodies  at  the  harbours.^^  If  local  authorities  failed 
to  take  suitable  action,  the  Committee  might  clear  con- 
gested ports.     To  increase  the  supply  of  labour,  many  of 

19  Cd.  8483,  p.  9 ;  L.  T.,  Jy.  2,  1917,  P-  3. 

20  B.  T.  J.,  Nov.  II,  1915,  P-  373;  Mar.  i,  1916. 

21  Ibid.,  Nov.  II,  1915,  P-  377. 


/ 


I  .1 


150  WAR    TIME    CONTROL    OF    INDUSTRY 

the  40,000  dockers  who  had  joined  the  army  were^soon 
ordered  back  and  it  was  urged  thit  more  should  be.^^ 

By  February,  19 16,  it  was  estimated  that  of  every  100 
ships  available  for  carrying  merchandise  before  the  war 
only  67  were  still  available  and  that  of  these  21  were 
foreign  owned.^--^     New  measures  for  economizing  car- 
rying space  were  therefore  devised.     Chief  of  these  was 
the  restriction  put  upon  the  importation  of  bulky  com- 
modities.    In  principle  this  was  ominous.     It  implied 
that  supplies  of  non-essentials  would  be  cut  off  and  no 
one  could  foresee  what  commodities  circumstances  might 
eventually  force  the  Government  to  declare  relatively  non- 
essential.    For  the  moment  no  great  hardships  were  in- 
volved.    A  Royal  Proclamation  of  February  15,  191^* 
prohibited,  as  from  March  i,  the  importation,  except  un- 
der licence,  of  paper  and  all  materials  used  in  its  manufac- 
ture, of  periodical  publications  exceeding  sixteen  pages  in 
length  (except  single  copies  through  the  post),  of  raw 
and  manufactured  tobacco,  of  furniture  woods,  and  of 
stone  and  slate  for  building.     A  month  later  canned  and 
dried  fruits  were  added  to  the  list,  currants  excepted.^* 
The  official  interpretation  immediately  put  upon  these  re- 
strictions explained  that  two-thirds  of  the  usual  impor- 
tation would  be  licenced.2«     The  cutting  off  of  one-third 
would  in  the  case  of  paper  alone  save  tonnage  equivalent 
to  that  of  all  ships  entering  British  ports  during  two  or 

22  P.  D.  C,  1916,  LXXX,  330. 

23  Ibid.,   p.   294.  Tv^r  <  n^, 

2*B.  T.  J.,  Feb.  17,  1916,  p.  451;  Mar.  16;  p.  773- 
25  Ibid.,  Feb.  24,  p.  537. 


SHIPPING 


151 


three  weeks.     Restrictions  upon  other  materials  would 
bring  the  saving  to  about  one  month's  tonnage  entries. 
Since  the  Admiralty  had  taken  25-30  per  cent,  of  the 
mercantile  tonnage,  the  order  gave  back  space  equivalent 
to    one-third    of    this.     Several   commissions    were   ap- 
pointed to  administer  the  new  order.^^     At  the  end  of 
March  the  list  of  imports  requiring  licences  was  increased 
by  several  commodities  —  baskets,  cement,  cotton  yam 
and  manufactures    (except  hosiery  and  lace),   cutlery, 
fatty  acids,  furniture  and  other  manufactures  of  wood, 
hardware,  oil  cloth,  soap,   toys,  games,  playing  cards, 
beech,  birch,  elm,  and  oak  woods,  finally  woollen  and 
worsted  manufactures  of  all  kinds,  except  yarns.^^     In 
August  glass  was  added.^^     From  the  beginning  of  1917 
the  allowance  of  paper  and  paper  materials  was  still 
further  reduced  from  two-thirds  of  the  normal  supply  to 
one-half  of  it.^^     The  promise  of  such  elaborate  regula- 
tions was  high,  but  their  results  were,  as  the  sequel  will 
show,  disappointing. 

Despite  the  requisitioning  of  shipping  for  the  carriage 
of  meat  and  wheat  and  the  beneficent  effect  of  this  action 
in  the  spring  of  1916,  public  feeling  in  the  autumn  of  that 
year  was  becoming  more  and  more  incensed  over  the 
seeming  profits  of  shipowners.  To  this  discontent  Mr. 
Anderson  gave  voice  in  Parliament  on  October  1 7.  Quot- 
ing a  recent  pronouncement  of  Mr.  John  Hill,  a  trade 

26  Ibid.,  Mar.  23,  p.  854. 

27  Ibid.,  Mar.  30,  p.  938. 

28  Ibid.,  Aug.  24,  p.  546. 
2»  Ibid.,  Dec.  7,  p.  715. 


I' 


152 


WAR    TIME   CONTROL   OF  INDUSTRY 


union  secretary  of  the  Boiler-makers'  Society,  he  declared 
that,  while  wages  had  since  July,  1914,  advanced  less  than 
15  per  cent.,  the  average  increase  in  the  cost  of  living  was 
officially  stated  to  be  45  per  cent.     Ships  built  had  been 
sold  at  prices  from  500  to  1000  per  cent,  above  the  cost 
of  their  production  in   1914.     One  ship-building  com- 
pany, not  the  most  prosperous  one,  on  a  capital  of  £360,- 
000  had  within  a  year  made  a  profit  of  £240,000,  or  70 
per  cent.     As  for  shipowners,  Mr.  Anderson  continued, 
the  shipping  journals  show  South  American  freights  ris- 
ing from  10  s.  at  the  beginning  of  the  war  to  150  s.  early 
m  19 16.     In  view  of  this  the  workmen  cannot  be  per- 
suaded that  profits  are  not  excessive. ^^ 

To  counteract  this  current  of  public  discontent,  Mr. 
Runciman  on  October  17,  1916,  made  an  important  speech 
in  the  Commons  "  giving  details  now  for  the  first  time." 
"  I  am  doing  so,''  he  continued,  ''  because  I  understand 
that  outside  feeling  is  directed  against  shipping.     I  think 
it  about  time  the  country  knew  that  out  of  a  total  mer- 
chant fleet  of  nearly  10,000  vessels,  only  iioo  [elsewhere 
1 1 18]  ocean-going  vessels  are  free  to  conduct  their  own 
operations."     Of  the  remainder  the  large  number  in  the 
service  of  the  army  and  navy  were,  he  said,  under  blue- 
book  rates ;  others,  requisitioned  by  the  Foodstuflfs  Requi- 
sitioning Committee  or  trading  on  behalf  of  the  Allies, 
were  under  fixed  rates  far  below  the  open  market  rates' 
Of  the  1 1 18  vessels  not  controlled,  297  were  permanently 
employed  abroad  between  foreign  ports  to  maintain  Brit- 
«o  P.  D.  C,  1916,  LXXXVI,  468. 


SHIPPING 


153 


ish  interests ;  588  were  cargo  liners  or  tramps  chartered 
to  liner  companies  to  keep  alive  the  connection  with  other 
countries,  "a  mere  skeleton  of  the  organization  neces- 
sary"; 233,  finally,  were  free  tramps,  the  recipients  of 
the  high  freights  which  occasionally  figured  in  the  press 
and  formed  the  basis  of  questions  asked  in  the  House. 
If  it  seems  to  any  one  that  such  freights  are  taken  from 
the  flesh  and  blood  of  the  people,  let  him  reflect  that  the 
number  of  free  vessels  engaged  in  carrying  food  is  about 
60. 

As  to  the  actual  relation  between  the  rising  prices  of 
foodstuffs  and  rising  freights,  the  figures,  Mr.  Runci- 
man continued,  are  as  follows :  The  price  of  meat  up  to 
the  autumn  of  19 16  appears  to  have  increased  by  4  d.  or 
5  d.  a  pound,  American  bacon  by  8d.  or  9d.,  Canadian 
cheese  by  4  d.  or  5  d. ;  of  these  amounts  ^  d.,  Yi  d.,  >4  d., 
respectively,  have  been  due  to  increased  freights.^ ^  It 
was  the  same  with  wheat.^^  As  to  purchases  of  wheat 
in  Australia,  the  Government  could  not  make  such 
unless  it  was  prepared  to  divert  vessels  into  that  trade. 
The  diversion  was  uneconomic,  since  a  cargo  vessel  could 
make  only  two  and  one-half  voyages  to  Australia  in  a 
wheat  year,  whereas  tramp  vessels  run  across  the  Atlan- 
tic from  six  to  eight  times  a  year.  The  Government, 
however,  was  prepared  to  be  uneconomic  in  order  that 
supplies  might  not  depend  on  one  market  alone.  To  get 
the  best  dispatch  from  cargo  vessels  by  inducing  man- 

31  Ibid.,  pp.  505-508. 

32  No  figures  were  given. 


I 


154 


WAR    TIME   CONTROL   OF   INDUSTRY 


SHIPPING 


15s 


agers,  captains,  and  engineers  to  hurry  them,  it  had  been 
decided  to  pay  for  wheat  carriage  on  the  basis  of  voyage 
charters.  At  the  moment  rates  were  being  worked 
out,  not  by  shipowners,  but  by  those  skilled  in  making 
such  calculations.^^ 

Such  was  the  somewhat  belated  explanation  of  the 
President  of  the  Board  of  Trade.  It  was  true  that  the 
Government  had  already  done  much  to  remedy  a  situation 
which  for  a  time  allowed  to  shipowners,  as  Mr.  Lloyd 
George  later  declared,  prodigious  profits.^*  Even  Lord 
Furness,  the  president  of  a  great  shipping  firm,  admitted 
that  for  two  years  earnings  had  been  "  greatly  in  ex- 
cess of  an  average  pre-war  year,"  and  that  the  companies 
had,  "  like  other  trades  been  allowed  to  retain  a  margin 
ranging  from  50  per  cent,  to  20  per  cent,  of  such  excess 
earnings."  Some  owners  and  some  tramp  companies 
after  making  large  profits  had,  he  added,  sold  their  ton- 
nage at  high  prices,  distributing  both  earnings  and  cap- 
ital.^^ 

The  ill-repute  which  in  the  eyes  of  the  public  attached 
to  such  prosperity  could  not,  however,  be  expected  to  dis- 
appear at  once.  The  annual  statements,  indeed,  of  cer- 
tain steamship  companies  made  so  late  as  July,  19 17, 
continued  to  reflect  their  recent  gains.  The  profits  of 
the  British  Steamship  Investment  Trust  (Limited)  for 
the  year  ending  June  30,  19 17,  enabled  the  directors  to 
recommend  a  dividend  on  the  deferred  stock  of  30  per 

S3  Ibid.,  p.  503. 

84  L.  T.,  Dec.  20,  1916,  p.  10. 

S5  Ibid.,  Jy.  30,  1917.  p.  12, 


cent,  less  tax.  This,  with  a  bonus  of  10  per  cent,  less  tax 
and  an  interim  bonus  of  10  per  cent,  paid  in  January, 
brought  the  total  distribution  for  the  year  to  50  per  cent, 
less  tax.  At  the  same  time  Furness,  Withy  &  Co. 
(Limited)  distributed  20  per  cent,  tax  free  as  the  year's 
return  to  shareholders.^^ 

In  his  annual  address,  however.  Lord  Furness  sounded 
a  note  of  warning.  During  the  commercial  year,  not 
only  had  the  shipping  industry  like  all  others  become  sub- 
ject to  the  increased  excess  profits  tax  of  80  per  cent, 
(formerly  60  per  cent.),  but  the  Government  had  requi- 
sitioned at  blue-book  rates  practically  all  ocean-going 
tonnage.  It  was  certain  that  this  remuneration  would 
not  leave  a  profit  equal  to  the  pre-war  average.  Tonnage, 
too,  could  now  be  withdrawn  from  any  route  and  applied 
where  it  would  best  serve  national  needs.  This  was  as 
it  should  be,  but  hardship  would  come  with  the  attempt 
to  recover  the  neglected  routes.  For  foreign  owners 
w^ere  meanwhile  making  huge  profits  from  uncontrolled 
freights,  being  free  as  well  from  British  competition. 
Their  accumulated  reserves  would  make  them  formidable 
competitors  in  the  future.  Then,  at  least,  the  reserves 
accumulated  by  British  companies  early  in  the  war  would 
be  of  great  avail  to  the  industry.^^ 

In  November,  1916,  a  month  after  Mr.  Runciman  gave 
his  "  details  "  in  the  Commons,  the  Committee  appointed 
to  investigate  the  causes  of  the  increased  price  of  com- 

86  Ibid.,  Jy.  20,  p.  7. 

87  Ibid.,  Jy.  30,  p.  12. 


iS6 


WAR    TIME    CONTROL   OF    INDUSTRY 


modities  made  its  second  report.  Discussing  the  reasons 
for  the  rise  in  wheat,  the  Committee  was  led  to  give  a 
brief  account  of  shipping.  The  information  contained 
in  this  is  of  great  value  and  has  already  been  quoted. 
At  the  conclusion  of  its  investigations  the  Committee 
makes  certain  recommendations.  If  occasion  should 
offer,  Governmental  control  over  freight  rates  should  be 
extended;  competition  for  ships  should  be  reduced,  a 
policy,  the  Committee  understands,  already  under  care- 
ful consideration ;  non-essential  imports  should  be  further 
excluded  and  certain  other  commodities  should  be  subject 
to  preferential  treatment;  lastly,  the  supply  of  tonnage 
should  be  increased,  particularly  by  new  construction.^^ 

The  end  to  be  attained  by  the  first  two  of  these  recom- 
mendations was  soon  realized  through  the  measures  taken 
by  the  new  Controller  of  Shipping,  Sir  J.  P.  Maclay.  In 
the  winter  of  1917  he  applied,  first  to  vessels  in  the  Aus- 
tralasian trade  and  then  systematically  to  all  liners, 
a  new  organization  of  control.  All  shipowners  were 
formed  into  a  committee  of  management  on  which  the 
Shipping  Controller  was  represented ;  and,  through  the 
provision  that  all  profits  above  those  allowed  by  blue- 
book  rates  should  go  to  the  state,  all  motives  inducing  to 
competition  were  eliminated.^^ 

In  May,  19 17,  the  Chancellor  of  the  Exchequer  de- 
scribed the  existing  situation  and  explained  the  Govern- 
ment's final  policy  toward  shipping.     After  confessing 

38  Cd.  8483,  p.  II. 

3»  L.  T.,  May  3,  iQi?,  P-  7- 


SHIPPING 


157 


that  there  had  been  too  long  a  delay  in  taking  over  con- 
trol of  shipping,  that  shipowners  had  "  had  a  very  good 
time,"  and  that  he  himself  was  not  devoid  of  responsi- 
bility for  what  had  happened,  he  stated  that,  of  all  ships 
of  i6cx)  tons  and  upwards,  90  per  cent,  had  at  length 
been  requistioned  or  had  been  notified  that  they  would  be. 
It  was  true,  he  admitted  further,  that  even  blue-book 
rates  had  at  first  made  possible  a  large  return.  Owing 
to  increased  costs  of  operation,  this  was  no  longer  true 
and,  under  the  terms  of  requisitioning,  ships  would  no 
longer  secure  so  much  as  their  pre-war  profits.  Where 
it  had  not  been  possible  to  requisition  vessels,  the  Ship- 
ping Controller  had  control  over  rates  of  freight.  In  the 
case  of  the  4000  or  5000  small  coasting  vessels,  whose 
masters  were  often  their  owners,  the  Government  had  not 
thought  it  wise  to  fix  a  definite  scale  of  profit,  lest  en- 
terprise be  checked.  The  nation  was  too  dependent  upon 
them  to  incur  such  a  risk. 

In  one  matter  the  Chancellor  of  the  Exchequer  v^ent 
so  far  as  to  call  forth  the  protest  of  shipowners.  One 
of  the  provisions  of  the  excess  profits  law  was  that  if  in 
any  year  the  return  from  a  business  was  less  than  the  pre- 
war profits,  the  deficiency  should  be  made  good  out  of 
the  excess  profits  taken  by  the  Government  in  preceding 
years.  This  clause  Mr.  Bonar  Law  proposed  to  suspend 
regarding  shipowners  in  view  of  their  excessive  profits 
in  the  past.^^  In  a  Memorandum  of  June  30  the  Ship- 
owners' Parliamentary  Committee  protested.     In  April, 

*o  Ibid.,  p.  9. 


158 


WAR    TIME    CONTROL   OF    INDUSTRY 


1916,  when  Mr.  McKenna,  then  Chancellor  of  the  Ex- 
chequer, had  urged  them  to  build  and  buy  at  war  prices 
and  when  they  had  explained  that  they  could  not  do  so 
unless  the  cost  were  to  l)e  met  out  of  their  war  earnings, 
Mr.  McKenna  had  given  them  a  pledge.     He  had  prom- 
ised them  that,  as  soon  as  there  could  be  ascertained  the 
value  on  a  peace  basis  of  the  vessels  which  they  might 
build  or  purchase  at  war  prices,  they  would  be  allowed  out 
of  their  war  earnings  as  a  zvhole  the  difference  between  the 
price  so  paid  and  such  assessed  value.     This  pledge,  the 
Memorandum  continued,  was  broken  by  the  proposal  of 
the  Chancellor  of  the  Exchequer.     Whether  allowances 
were  to  be  made  them  would  now  depend  upon  whether 
the  profits  of  a  current  year  were  in  excess  of  the  pre- 
war profits.     Since  this  would  seldom  happen,  the  Gov- 
ernment was  doing  its  utmost  to  prevent  the  redemption 
of  Mr.  McKenna's  pledge.     The  shippers  then  explained 
that  rising  freights  had  been  forced  upon  them  by  the 
competitive  bidding  of  cargo  owners  and  that  rates  could 
have  been  kept  down  only  by  prohibiting  the  importation 
of  less  essential  cargoes.^  ^     Whatever  the  merits  of  the 
case,  the  protest  clearly  shows  that  the  Government's  ac- 
tion during  the  last  six  months  had  borne  hard  upon  the 
shippers  and  that  the  first  two  recommendations  of  the 
Price  of  Foodstuffs  Committee  had  received  ample  at- 
tention. 

The  third  recommendation  of  the  Committee,  looking 
to  the  economy  of  tonnage  by  the  further  reduction  of 

*i  Ibid.,  Jy.  2,  p.  3. 


SHIPPING 


159 


i 


imports,  concurred  with  the  suggestion  of  the  shipowners 
and  was,  it  appears,  pertinent.  The  policy  in  question  had 
been  adopted  at  the  beginning  of  19 16  and  had  been  ex- 
tended. Owing  to  a  liberal  issue  of  licences,  however,  it 
had  accomplished  comparatively  little.  A  remark  became 
current  that  the  way  to  increase  the  import  of  an  article 
was  to  issue  a  prohibition  that  it  should  not  come  in. 
Although  the  importation  of  tobacco  was  prohibited,  the 
country  in  September,  1916,  bought  £880,000  worth  of  it. 
Paper  imported  during  the  same  month  was  valued  at 
£652,000  (some  of  it  cardboard  boxes),  manufactures  of 
silk  at  £1,000,000,  earthenware  and  glass  at  £188,000.^2 

In  December,  however,  as  has  been  noted,  the  impor- 
tation of  paper  was  cut  from  two-thirds  of  the  normal  to 
one-half, 43  ^j^^^  -^^  February  Mr.  Lloyd  George  explained 
in  the  Commons  that  unessential  articles  of  diet  must  no 
longer  be  imported.  Aerated  waters,  apples,  and  toma- 
toes came  under  the  ban;  oranges,  bananas,  grapes,  al- 
monds, and  nuts  were  restricted  to  25  per  cent,  of  the 
importation  of  1916;  canned  salmon  was  reduced  50  per 
cent;  Indian  tea  was  shut  out  to  some  extent,  foreign 
teas  altogether.  Although  coffee  and  cocoa  were  barred, 
there  were  large  stocks  of  both  in  the  country,  stocks 
that  would  have  gone  on  to  Germany  had  they  not  got 
stuck  in  England. 

When  summer  came  and  the  submarine  was  rapidly 
reducing  merchant  tonnage,  it  became  clear  that  staple 

^2  P.  D.  c,  1916,  LXXXVII,  918. 
*3  B.  T.  J.,  Dec.  7,  1916,  p.  715. 


;,l,;rfi4fi£!*,. 


i6o 


WAR    TIME   CONTROL   OF   INDUSTRY 


SHIPPING 


l6l 


and  important  imports  would  have  to  be  restricted. 
Among  these  was  cotton.  The  cotton  industry  in  191 6 
had  suffered  from  a  shortage  in  the  year's  supply  of  raw 
material  which  by  November  20  had  driven  the  price  to 
12.59  d.  a  pound,  the  highest  for  50  years.  Nor  did  it 
thereafter  recede,  but  on  May  25,  1917,  stood  at  12.9  d. 
At  about  this  time  demands  for  higher  wages  became  in- 
sistent. Threats  of  strike  on  the  part  of  the  weavers  were 
on  May  26  met  by  concessions.  Soon  they  were  to  re- 
ceive what  amounted  to  a  20  per  cent,  advance  on  pre-war 
wages,  an  increase  already  secured  by  the  spinners."** 
Scarcely  had  this  been  settled  when  the  spinners  joined 
with  the  card-room  operatives  in  demanding  a  10  per 
cent,  war  bonus.  Since  the  owners  threatened  a  lockout, 
the  Board  of  Trade  intervened  to  secure  arbitration  by 
the  Committee  on  Production.  On  June  17  such  arbi- 
tration was  accepted  by  the  men  and  a  crisis  averted."**^ 
It  was  during  these  critical  days  that  the  shortage  of 
the  crop  was  intensified  by  a  lack  of  shipping  facilities. 
Already  tonnage  for  the  conveyance  of  cotton  to  the  East 
had  been  restricted  and  the  effect  of  this  had  been  felt.*^ 
By  the  middle  of  June,  considerable  machinery  was  idle, 
the  Government  had  warned  exporters  to  keep  down  their 
engagements,  and  the  trade  was  prepared  for  a  compul- 
sory limitation  of  the  consumption  of  cotton.     Supplies 

^*  L.  T.,  Ann.  Fin.  and  Com.  RezK,  Jan.  19,  1917,  pp.  8,  19;  M.  G., 
May  29. 

^•iL.  T.,  May  31,  1917,  p.  3;  Je.  8,  p.  S ;  Je.  13,  p.  7:  Je.  18,  p.  12. 

*^  Weekly  Record  of  the  Woolen  and  Textile  Trades'  Association, 
Apr,  10,  May  i,  1917;  L.  T.,  Jy.  2S,  1917,  P-  12. 


of  raw  cotton  on  hand  were  413,530  bales  as  compared 
with  659,350  a  year  before;  on  the  other  hand,  stocks  of 
finished  goods  were  accumulating.*"^  At  the  end  of  June 
a  Board  of  Control,  chosen  almost  exclusively  from  the 
leading  importers,  spinners,  manufacturers,  merchants, 
and  trade  unions  was  set  up.  Power  was  given  it  to 
ration  raw  materials,  to  impose  shorj;  time,  to  limit  the 
number  of  spindles  in  operation,  and  to  fix  prices.  Thus 
fully  endowed  with  authority,  it  first  forbade  the  purchase 
of  raw  cotton  abroad  except  under  licence;  next  it  or- 
dered a  census  of  all  cotton  supplies  in  England.*^  On 
the  Liverpool  Cotton  Market  dealings  in  "  futures " 
ceased  and  "  spot "  business,  almost  for  the  first  time  in 
the  history  of  the  market,  was  marked  ''  sales  nil.''  At  a 
meeting  on  July  14,  the  Cotton  Control  Board  decided  not 
to  recommend  any  immediate  curtailment  of  production. 
On  the  other  hand,  it  continued  for  the  moment  its  policy 
of  granting  licences  for  the  purchase  of  one  week's  supply 
of  spot  cotton  at  a  time  but  these  only  to  spinners  who  had 
less  than  two  months'  supply  in  stock.^^  Before  a  month 
had  passed,  however,  limitation  of  production  was  seen 
to  be  a  necessity.  On  August  10  the  Board  of  Control 
announced  its  scheme,  already  approved  by  the  Board  of 
Trade.  In  as  much  as  the  Shipping  Controller  was  mak- 
ing a  great  effort  to  increase  the  tonnage  available  for 
cotton,  particularly  by  arranging  with  the  United  States 

*7  M.  G.,  May  29,  1917;  Je.  23  (editorial)  ;  L.  T.,  Jy.  25,  p.  12. 
*8  Ibid.,  Je.  28,  pp.  4,  5 ;  Jy.  2,  p.  5. 
*9L.  T.,  Je.  30;  Jy.  14,  p.  7. 


1 62 


WAR    TIME   CONTROL   OF   INDUSTRY 


Government  for  the  provision  of  additional  tonnage,  the 
new  regulations  were  to  be  effective  for  a  period  of  only 
three  months.  Cotton-spinning  firms  were  ordered  to 
stop  on  September  3  all  but  60  per  cent,  of  their  total 
spindlage  and  equivalent  preparatory  machinery.  Li- 
cences might  be  got  on  payment  of  from  ys  d.  to  yz  d. 
per  spindle  to  run  as  much  as  70  per  cent,  of  the  spindles 
and  even  more  if  Government  contracts  were  in  question. 
To  run  more  than  60  per  cent,  of  the  looms,  payment  of 
from  2  s.  6  d.  to  5  s.  per  loom  was  required.  Money  re- 
ceived from  these  sources  the  Board  of  Control  would  use 
to  prevent  depletion  of  trade  union  funds,  to  ameliorate 
want  and  distress  caused  by  temporary  unemployment, 
and  for  any  other  emergency  brought  on  by  the  crisis. 
The  restrictions  would  be  administered  jointly  by  the 
Board  of  Control,  the  trade  unions,  and  the  employers* 
associations.^*^ 

This  rationing  of  the  cotton  industry  illustrates  per- 
haps better  than  anything  else  the  exigencies  in  which 
British  shipping  found  itself  in  the  summer  of  19 17. 
The  corresponding  rationing  of  the  woollen  trade,^^  ad- 
ministered with  considerable  friction,  was  due  only  in 
part  to  shortage  of  shipping.  In  that  case  the  year's 
supply  of  raw  material  also  gave  concern.  But  when 
two  of  the  most  extensive  of  Great  Britain's  industries 
were  affected  as  were  these  two,  the  need  of  increased 
tonnage  became  imperative.     The   fourth  recommenda- 


'50  L.  T.,  Aug.  II,  1917,  p.  6. 
51  Cf.,  above,  p.  118. 


SHIPPING 


163 


tion  of  the  Committee  on  food  prices  accordingly  became 
pertinent.  This,  it  will  be  remembered,  was  that  the 
available  supply  of  tonnage  should  be  increased,  espe- 
cially by  new  construction.  The  summer  of  19 17  saw 
the  Government  resolved  upon  remedial  measures  of  this 
kind. 

Mr.  Runciman  announced  in  November,  19 16,  that  two 
and  one-fourth  million  gross  tons  of  shipping,  or  about 
three  million  tons  dead  weight,  had  been  lost  since  the 
beginning  of  the  war.^^  Nor  had  the  tonnage  con- 
structed during  the  same  period  counterbalanced  this  loss. 
It  had,  on  the  contrary,  declined  markedly  in  comparison 
with  pre-war  production.  In  19 13,  Great  Britain 
launched  1,977,573  gross  tons;  in  1914,  1,722,154  tons; 
in  1915,  649,336  tons;  in  1916,  582,305  tons.^^  Actual 
losses  had  therefore  not  been  repaired  by  something  like 
a  million  gross  tons.  The  same  deficiency  appears  in  the 
statistics  which  Lord  Curzon  laid  before  the  Lords  in 
May  5,  1917:^* 
British  ships  of  100  tons  and  over 

in  June,  19 14,  were  10,124  with  a  tonnage  of  20,523,- 

706  gross  tons,  but  in  December,  19 16,  were  9757  with 

a  tonnage  of  19,765,516  gross  tons; 
British  ships  of  1600  tons  and  over 

in  June,  19 14,  were  3900  with  a  tonnage  of  16,900,000 

52  p.  D.  C,  1916,  LXXXVII,  849- 

^3L.  E.,  Aug.  4,  1917.  Mr.  Lloyd  George  on  Aug.  15  told  Parlia- 
ment that  the  construction  for  1915  and  1916  was  688,000  tons  and 
538,000  tons  respectively, 

5*  B.  T.  J.,  Je.  I,  1917,  p.  219. 


164 


WAR    TIME    CONTROL   OF    INDUSTRY 


gross  tons,  but  on  March  31,  19 17,  were  3500  with  a 

tonnage  of  16,000,000  gross  tons. 

While  the  first  half  of  this  schedule  shows  the  net  loss 
of  nearly  a  million  tons  of  shipping  up  to  the  end  of  1916, 
the  second  half  shows  the  increasing  destruction  of  larger 
vessels  during  the  early  months  of  19 17.  The  sinking 
of  tonnage  due  to  the  new  activity  of  submarines  after 
February  i  was  described  by  Mr.  Lloyd  George  in  Parlia- 
ment on  August  16.  In  April  the  loss  had  been  greatest, 
amounting  to  550,000  tons  gross;  in  July  it  had  fallen  to 
320,000  tons  and  in  August  it  was  still  declining.'^'^  By 
the  end  of  September  the  total  losses  during  eight  months 
approximated  the  losses  before  that  period,^^  being  nearly 
two  and  one-half  million  tons.  Only  a  great  acceleration 
in  construction  could  repair  this  ruin. 

At  the  end  of  1916  the  Board  of  Trade  began  to  take 
measures  to  provide  against  the  recurrence  of  another 
year  of  slight  output.  A  large  number  of  engineers, 
fitters,  and  mechanics  was  recalled  from  the  Colours  and 
from  yards  doing  Admiralty  and  munitions  work.  The 
Admiralty  allowed  some  forty-five  merchant  vessels  near- 
ing  completion  to  be  finished  while  certain  less  necessary 
Admiralty  work  stood  aside.  Arrangements  were  made 
to  have  the  companies  in  the  shipbuilding  ports  pool  their 
skilled  labour,  e.  g.,  the  eight  or  ten  shipbuilding  yards  and 
the  numerous  engineering  works  on  the  Wear.  Skilled 
men  were  to  concentrate  their  labour  on  the  vessels  near- 

55  L.  T.,  Aug.  17,  1917,  P-  8. 
59  N.  Y.  Times,  Sept.  29,  191 7. 


jl 


11 


SHIPPING  165 

est  completion  regardless  of  the  yard  to  which  they  be- 
longed.    The  shortage  of  steel,  it  was  hoped,  would  soon 
disappear  as  the  Ministry  of  Munitions  extended  its  steel 
works.^^     In  January,  19 17,  the  Shipping  Controller  took 
steps  to  buy  all  available  tonnage  in  the  United  States 
and  Canada,  to  lay  down  standard  cargo  carriers  in  Great 
Britain,  and  to  push  to  completion  more  than  two  million 
tons  of  unfinished  ships.     By  August  Mr.  Lloyd  George 
could  declare  that  480,000  tons  had  been  turned  out  dur- 
ing the  first  half  of  1917  and  that  1,100,000  tons  would 
be  during  the  second  half.     Some  320,000  tons  would 
have  been  bought  and  the  total  addition  to  Great  Britain's 
shipping  during  the  year  would  therefore  be  1,900,000 
tons.     This    was    very    nearly    the    normal    output    of 
1913.     The  Premier  predicted  that  through  production 
and  purchase  the  acquisition  of  19 18  would  be  3,000,000 
tons.^^     But  two  million  tons  or  even  three  million  tons 
added  to  British  shipping  yearly  would  not  now  repair 
the  havoc  wrought  by  submarines.     The  final  exhorta- 
tion of  the  Shipping  Controller,  therefore,  was  that  the 
United  States  should  build  extensively  enough  not  only 
to  transport  its  troops  and  its  munitions  of  war  but  also 
to  create  the  surplus  needed  to  counterbalance  British  net 
losses.     He  suggested  that  it  set  itself  to  construct  six 
million  tons  of  merchant  shipping.     To  produce  three 
times  as  much  as  the  British  at  their  best  have  done  and 

"P.  D.  C,  1916,  LXXXVII,  852;  B.  T.  J.,  Mar.  i,  1917,  p.  609; 
L.  T.,  Dec.  23,  1916,  p.  3. 
"L.  E.,  Aug.  4,  1917;  L.  T.,  Aug.  17,  p.  8. 


1 66 


WAR    TIME    CONTROL   OF    INDUSTRY 


six  times  what  it  itself  has  previously  done,  is  not  a 
simple  task,  but  it  is  one  of  vital  importance  for  the 
Allied  cause/'''^ 

59  N  Y.  Times,  Sept.  29,  1917. 


i 


FOOD 

SUGAR,    MEAT,    AND   BREAD 

To  the  tnree  foodstuffs  which  Mr.  Askwith  once  men- 
tioned as  essential,  government  regulation  has  during 
the  war  been  applied  at  different  times  and  from  some- 
what different  motives.  Sugar  was  at  once  taken  in 
hand,  since  the  supply  was  highly  precarious ;  before  very 
long  much  of  the  meat  imported  into  Great  Britain  was 
appropriated  that  the  Allied  armies  might  be  adequately 
fed;  but,  although  from  the  beginning  of  the  war  the 
Government  undertook  to  regulate  the  supply  of  wheat, 
it  did  not  until  after  two  years  make  far-reaching  regula- 
tions touching  the  sale  and  consumption  of  bread. 

When  on  August  4,  19 14,  shops  reopened  after  the 
bank  holiday,  in  certain  large  provincial  cities  there  was 
a  rush  to  buy  provisions.  Next  day  the  alarm  spread  to 
London,  where  many  small  shops  were  speedily  sold  out 
and  several  large  ones  had  either  to  stop  the  sale  of  pro- 
visions or  to  refuse  to  customers  more  than  the  quantities 
usually  purchased.  In  the  West  End  and  in  some  resi- 
dential towns  people  loaded  their  motor  cars  with  food- 
stuffs and  turned  their  dwellings  into  store  houses.^  The 
prices  of  certain  commodities  rose  sharply.  Compara- 
tive quotations  of  July  28  and  of  August  6  for  flour  were 

1  A.  R.,  1914,  p.  184 ;  p.  D.  C,  1914,  LXV,  2213. 

167 


I 


1 68 


WAR   TIME   CONTROL   OF    INDUSTRY 


f^^ffi  'W ' 


i^d.,  i>$d. ;  for  sugar  (cubes)  2d.,  4d. ;  for  English 
beef  6y2  d.,  7>^  d.;  for  chilled  beef  6  d.,  7>^  d.;  for 
frozen  beef  4>^  d.,  6]^  d. ;  for  English  mutton  8  d., 
8>^  d. ;  for  Danish  bacon  8>4  d.,  io>^  d. ;  for  Colonial 
cheese  6}i  d.,  8>4  d. ;  for  butter  13  d.,  15  d.^  Flour  and 
English  meat,  it  will  be  seen,  rose  comparatively  little  in 
price,  imported  meat,  cheese,  and  butter  somewhat  more, 
while  the  rise  in  sugar  was  abnormal. 

A  Committee  of  the  Cabinet  with  Mr.  McKenna  as 
chairman  acted  promptly.  It  summoned  prominent  re- 
tail food  dealers,  who  recommended  what  might  serve  as 
maximum  prices  for  commodities  like  sugar,  butter, 
cheese,  and  bacon,  and  these  prices  were  at  once  officially 
adopted  by  the  Board  of  Trade.  After  investigation,  the 
Cabinet  Committee  announced  that,  including  the  home 
crop  then  being  harvested,  there  was  in  the  United  King- 
dom food  for  five  months.  Trade,  the  Committee  pre- 
dicted, would  soon  be  resumed,  and  hoarding  was 
deprecated.  In  the  House  of  Commons  a  bill  was  passed 
enabling  the  Board  of  Trade  to  take  possession  at  reason- 
able prices  of  foodstuffs  which  were  being  unreasonably 
withheld  or  cornered.^  Retail  provision  dealers  under- 
took not  to  supply  in  the  future  any  customer  with  more 
food  than  he  normally  required.  Ships  w^ere  soon  bring- 
ing in  large  quantities  of  wheat,  flour,  meat,  and  fruit. 
The  Canadian  Government  offered  a  gift  of  98,000,000 

2  L.  T.,  Aug.  7,  1914. 

3  A   royal   proclamation  of    Sept.    17  carried   out  this   provision ; 
B.  T.  J.,  Sept.  24,  1914,  p.  808;  Cf.  P.  D.  C,  1914,  LXV,  2212-2222. 


FOOD  169 

lbs.  of  flour  to  meet  the  needs  of  the  people  and  the  prov- 
ince of  Alberta  undertook  to  deliver  free  in  English 
ports  1,000,000  bushels  of  Alberta  oats.  Through  its 
control  of  the  railways  the  Government  could  regulate 
the  distribution  of  food  supplies  and  prevent  panic  prices. 
The  Board  of  Education  made  ready  to  provide  meals, 
during  vacations  as  well  as  during  sessions  of  school, 
both  for  children  under  school  age  or  already  out  of 
school  and  for  those  in  attendance.*  So  effectively  was 
the  crisis  met  that  the  days  of  panic  were  soon  passed. 

SUGAR 

The  extraordinary  movement  in  the  price  of  sugar  dur- 
ing the  early  days  of  August  arose  from  the  sudden 
severance  of  relations  between  the  United  Kingdom  and 
the  chief  sources  of  its  sugar  supply,  Germany  and  Aus- 
tria. In  1913,  80  per  cent,  of  the  sugar  consumed  in  the 
British  Isles  was  beet  sugar,  and  of  this  68  per  cent,  came 
from  the  countries  in  question.^  Henceforth  the  product 
thus  cut  off  had  to  be  made  good  by  increased  importa- 
tions from  other  sugar-producing  countries  —  Cuba, 
Java,  the  United  States,  Mauritius,  the  British  West  In- 
dies, and  the  Philippines. 

To  insure  the  getting  of  a  supply  from  these  sources, 
the  Government  on  September  1 1  announced  the  appoint- 

*  P.  Alden,  War  and  the  Wage  Earner,  Contemporary  Review, 
Sept.,  1914,  p.  2,77- 

5  J.  W.  Robertson-Scott,  Opportunities  of  the  War.  Nineteenth 
Century  and  After,  Oct.,  1914.  The  beet  sugar  consumed  was 
1,570.053  tons,  the  cane  399,8.34  tons;  beet  sugar  from  Germany  was 
938,438  tons,  from  Austria  359,468  tons. 


170 


WAR    TIME    CONTROL   OF    INDUSTRY 


ment  of  a  Royal  Commission.  It  was  empowered  to 
enquire  into  the  amount  of  sugar  in  the  United  Kingdom, 
to  purchase  and  sell  sugar,  to  control  its  delivery,  and  to 
take  steps  to  maintain  the  supply.^  The  need  was  im- 
minent. Imports  into  the  United  Kingdom  during 
August,  1 9 14,  were  only  34,000  tons,  compared  with  184,- 
000  tons  during  August,  1913.  At  the  end  of  the  month 
the  stores  in  bonded  warehouses  had  fallen  to  one-half 
of  what  they  were  a  year  before  and  were  less  than  suffi- 
cient for  one  month's  consumption^  Germany  mean- 
while had  forbidden  the  exportation  of  her  beet  sugar  to 
the  United  Kingdom;  and  His  Majesty's  Government, 
replying  in  kind  on  September  30,  forbade  importation 
from  any  European  port,  that  trade  through  Holland 
might  not  put  money  into  the  enemy's  pockets.^ 

The  Commission  at  once  and  with  great  secrecy  en- 
tered the  market.  Acting  through  a  single  firm,  it  bought 
all  the  surplus  stock  of  Cuban  sugar,  although  "the 
Americans  wanted  the  whole  lot  for  themselves."  Other 
sugar  was  bought  from  Java,  Mauritius,  and  South 
America  before  any  one  suspected  that  the  Government 
had  "gone  into  the  grocery  business."  The  price  de- 
manded was  a  pretty  high  one,  "  a  world  price,  such  as 
Americans  would  pay."  ^ 

As  a  result  of  this  activity,  the  shortage  of  stocks  was 
remedied  by  November,  1914,  and  the  maximum  price, 

«  B.  T.  J.,  Sept.  24,  1914,  p.  810. 

7  Cd.  8483,  p.  20. 

8E.  N.,  Oct.  3,  1914;  B.  T.  J.,  Oct.  8,  1914,  P-  94- 

»M.  G.,  Sept.  29,  1916,  p.  12.    The  phrases  are  Mr.  Runciman's. 


FOOD 


171 


recommended  by  food  dealers  and  adopted  by  the  Board 
of  Trade,  could  be  reduced  from  3J4  d-  to  3^  d.  Lower 
it  could  not  be  put,  since  prices  paid  had  been  considerable, 
and  the  expense  of  transportation  from  distant  centres 
with  high  rates  of  insurance  and  high  dock  charges 
rendered  the  cost  even  to  the  Royal  Commission  far 
above  the  peace-time  price  of  sugar.  A  testimony  to  the 
efficiency  of  the  Commission,  however,  was  the  fact  that, 
although  it  bought  principally  in  the  United  States  and 
in  Cuba,  where  American  firms  had  powerful  interests, 
the  f.  o.  b.  price  of  granulated  sugar  in  New  York  in 
19 1 6  was  higher  than  the  contemporary  wholesale  price 
of  sugar  in  bond  in  London.  To  the  price  which  was 
paid,  the  Commission  added,  when  it  sold,  only  such  a 
fraction  of  the  cost  as  would  meet  insurance  and  working 
expenses,  would  create  a  surplus  looking  to  the  mainte- 
nance of  uniformity  in  price,  and  would  provide  a  fund 
to  meet  any  possible  reduction  in  prices  at  the  end  of  the 


war. 


10 


Not  only  did  the  Government  become  the  sole  importer 
of  sugar  but  it  assumed  control  of  the  refineries.  Re- 
finers received  from  it  raw  sugar  at  certain  prices  and 
sold  their  product  at  prices  prescribed.  Profits  thus  re- 
stricted were  further  controlled.  Anything  in  excess  of 
pre-war  returns  and  an  additional  percentage  agreed  upon 
was  henceforth  recoverable  by  the  Royal  Commission. 
Profits  of  wholesale  distributors  were  likewise  limited  to 

i^  per  cent,  of  what  they  paid.     Such  the  Commission 
10  Cd.  8483,  pp.  20,  21. 


1^2 


WAR    TIME    CONTROL   OF    INDUSTRY 


found,  on  investigating  pre-war  profits,  was  a  fair  return. 
On  the  other  hand,  no  attempt  was  made  to  keep  retail 
prices  entirely  uniform.  They  were  watched,  however, 
and,  if  here  and  there  traders  exacted  excessive  prices! 
action  was  taken.^^  In  this  way  the  Government  di- 
rected the  entire  sugar  trade,  controlling  all  transactions 
from  the  sale  by  the  distant  foreign  producer  to  the  pur- 
chase  by  every  household  in  the  United  Kingdom. 

The  prices  of  a  commodity  thus  controlled  should  have 
been,  it  might  be  expected,  advantageous  to  the  consumer. 
On  the  contrary,  the  cost  of  no  other  staple  article  of 
food  in  England  advanced  so  much.     By  the  end  of  1916 
the  increase  was  170  per  cent.     The  retail  price  of  white 
granulated  sugar  in  July,  1914,  was  2  d.  per  lb.,  in  Decem- 
ber, 1916,  it  was  5j^  d.     Much  of  this  advance  came  at 
once  and  was  due  to  the  restricted  sources  of  supply. 
After  the  sharp  August  advance  of  about  100  per  cent., 
the  price  fell  back  to  one  75  per  cent,  above  the  normal 
—  i.  e.,  to  31^  d.  retail.     There  it  remained  until  Septem- 
ber, 1915.     In  that  month  a  duty  of  y^  d.  per  lb.  was 
imposed,  but  was  counterbalanced  in  part  by  a  reduction 
of  Ya  d.  in  the  margin  allowed  to  wholesalers.     The  sell- 
ing price  remained  at  4  d.  until  January,  1916.     Before 
April,  however,  sugar  advanced  to  4^4  d.  and  then  an 
additional  duty  of  >^  d.  was  imposed.     The  rise  during 
the  remainder  of  the  year  was  slight.^^     Qf  the  total  ad- 
vance of  3^  d.  therefore,  i^  d.  is  attributable  to  taxa- 

^^  Ibid.,  p.  21. 

12  Ibid.,  pp.  19,  20. 


FOOD 


"^yz 


tion,  as  much  more  to  the  circumstances  attendant  upon 
the  outbreak  of  war,  and  half  as  much  again  to  the  rise 
of  the  early  months  of  19 16. 

The  last  increase,  owing  to  circumstances  which  had 
arisen,  was  not  so  much  deprecated  by  the  Government 
as  fostered  by  it.     At  the  close  of  19 15,  suppHes  of  sugar 
in  the  country  were  very  low  and  the  needs  of  the  army 
were  increasing.     To  check  consumption,  therefore,  the 
Royal  Commission  in  January,  1916,  advanced  the  price 
of  sugar  and  in  February  issued  an  appeal  to  the  public. 
Notwithstanding  the  high  price  prevailing  since  the  be- 
ginning of  the  war,  the  Commission  declared,  the  con- 
sumption of  sugar  had  decreased  but  little.     In  19 15  it 
was  scarcely  5  per  cent,  less  than  in  19 13.     Owing  to 
shortage  of  tonnage  a  restriction  of  importation  had  at 
length  become  necessary,  and  the  supply  of  sugar  brought 
into  the  country  might  be  cut  down  by  20-25  per  cent. 
In  view  of  this  the  public  were  urged  to  eat  less  sugar, 
less  jam,  less  chocolate.     The  Commission  did  not  add 
what  everybody  knew  —  that  the  higher  wages  of  the 
working  classes  had  enabled  them  to  indulge,  regardless 
of  prices,  in  more  sweets  than  ever  be  fore.  ^^     Once  more, 
at  the  end  of  February,  the  Government  put  up  the  price, 
but  after  that  not  again  during  19 16.     The  advance  in 
the  retail  price  of  sugar  from  4  d.  to  4%  d.  early  in  the 
year  is  therefore  explained  by  two  official  advances,  and 
these  were  primarily  due  to  the  Government's  desire  to 
economize  shipping  facilities. 

13  B.  T.  J.,  Feb.  10,  p.  388;  Feb.  17,  p.  457;  B.  T.  R.,  Feb.  i,  1916. 


174 


WAR    TIME    CONTROL   OF    INDUSTRY 


Such  efforts  were  only  in  part  successful.  The  25  per 
cent,  reduction  in  consumption  which  had  been  urged  was 
not  attained,  but  15  per  cent,  less  sugar  was  used  in  1916 
than  in  1915  and  19  per  cent,  less  than  in  1913.^*  At  the 
end  of  the  year  the  stock  on  hand  was  greater  than  a  year 
earlier. 

This  restriction  of  the  supply  was  not  effected  without 
arousing  criticism.     It  was  said  that  if  dealers  and  manu- 
facturers had  continued  to  import  on  their  own  account, 
they  would  in  many  cases  have  been  able  to  secure  more 
abundant  supplies.     To  which  the  Government  replied 
that  the  question  was  not  one  of  purchasing  in  foreign 
markets  but  of  transporting  the  purchases  to  Great  Brit- 
ain.    In  this  respect  the  Government  was  in  a  position 
to  meet  the  demand   better  than  the  private  importer. 
The  latter  would  have  to  pay  abnormal  freight  rates  if  he 
could  get  any  tonnage  at  all,  whereas  the  Government 
could  and  did  import  at  blue-book  rates.     Without  its 
control,  prices  would  probably  be  much  higher  than  those 
which  prevailed,  as,  indeed,  they  were  in  New  York.^^ 
Less  easily  answerable  were  the  charges  made  relative 
to  the  distribution  of  sugar.     In  the  Commons  in  No- 
vember, 19 1 6,  Mr.  Tickler  declared  that  it  was  hard  to 
persuade  the  public  that  the  Sugar  Commission  had  been 
a  success,  when  thousands  of  families  were  unable  to 
get  even  a  moderate  supply.     What  they  cannot  under- 

14  L.  T.,  Ann,  Fin.  and  Com.  Rev.,  Jan.  19,  1917,  p.  13:  L.  R,  Feb. 
17,  p.  299.  In  1913  the  consumption  of  the  United  Kingdom  was 
1,800,000  tons;  in  1916,  about  1,450,000  tons. 

15  Cd.  8483,  p.  21. 


FOOD 


175 


stand,  he  said,  is  that  they  can  go  into  a  confectioner's 
shop  and  buy  as  much  as  fifteen  pounds  of  sweets,  but 
at  the  nearest  grocer's  they  cannot  get  one  pound.  Mr, 
Runciman  already  had  lamented  the  situation.  "  We 
have  rationed  sugar,  and  thousands  and  thousands  of  let- 
ters have  come  from  the  poor.  God  forbid  that  we 
should  have  to  ration  anything  else."  ^^  Most  irritating 
during  the  autumn  was  the  difficulty  of  getting  sugar  for 
making  home-made  jam.  Quantities  of  fine  plums  rotted 
in  Nottinghamshire  orchards,  but  the  housewife  could  buy 
freely  only  boiled  sweets  at  the  confectioner's.^^ 

A  part  of  the  difficulty  was  inherent  in  any  rationing 
scheme.  Since  there  was  little  abatement  in  the  demand 
of  the  public,  a  degree  of  inconvenience  was  inevitable. 
But,  while  the  Commission  tried  to  apportion  its  sup- 
plies so  that  the  shortage  w^ould  be  everywhere  equally 
felt,  its  method  detracted  from  its  success.  Refined 
sugar,  whether  that  imported  by  the  Government  or  that 
turned  out  by  British  refiners,  was  apportioned  to  whole- 
sale dealers  in  proportion  to  the  amount  of  their  purchases 
in  19 1 5.  The  wholesalers  distributed  to  retail  dealers  on 
the  same  principle  and  the  latter  in  turn  were  expected  to 
sell  to  their  customers  as  equitably  as  possible.  Only  to 
the  jam  manufacturers,  in  view  of  the  size  of  the  home 
fruit  crop,  was  a  special  allotment  made.^^  This  principle 
of  apportionment  assumes  a  relative  immobility  of  popu- 

16  p.  D.  C,  1916,  LXXXVII,  873;  LXXXVI,  510. 

17  M.  G.,  Sept.  2,  1916,  p.  5 ;  Sept.  5,  editorial. 

18  Cd.  8483,  pp.  21.  22. 


176 


WAR    TIME    CONTROL   OF    INDUSTRY 


lation  and  demand  which  seems  not  to  have  existed. 
Growing  businesses  were  penaHzed  in  favour  of  those 
which  were  stationary  or  retrogressive.^^  Well-to-do 
customers,  also,  in  spite  of  the  principle,  succeeded  in 
getting  more  than  their  relative  share  of  the  allowance,^^ 
and  others  achieved  the  same  end  by  purchasing  in  a 
number  of  shops.  To  avoid  exhaustion  of  stocks  some 
grocers  required  that  other  foodstuffs  be  bought  with 
sugar  —  a  condition  that  sometimes  proved  onerous  to 
the  small  buyer.  Most  unfortunate,  however,  was  the 
working  of  the  principle  relative  to  the  poor  on  the  one 
hand,  and  to  the  confectioners  on  the  other.  Where 
shortage  demands  sacrifice,  it  is  better  that  luxuries  be 
cut  off  in  greater  measure  than  daily  needs ;  and  it  is  more 
serious  for  the  person  who  lives  close  to  the  margin  of 
subsistence  to  get  three  pounds  of  sugar  instead  of  four, 
than  it  is  for  the  patron  of  the  sweetshop.  These  defects 
in  distribution  were  brought  home  to  the  Government  by 
numerous  complaints,  and  early  in  19 17  remedies  were 
sought. 

First  of  all,  by  orders  of  January  11,  the  manufacture 
of  costly  sweets  and  the  use  of  sugar  or  chocolate  for 
covering  cake  or  pastry  were  prohibited.  Hitherto  in  the 
West  End  of  London  chocolates  costing  5  s.  or  more 
had  been  offered  for  sale.  At  first  it  was  proposed  to 
suspend  entirely  the  sale  of  chocolates  during  the  war; 
but  the  Food  Controller  argued  that  many  thousands 

^^  New  Statesman,  Mar.  10,  1917,  p.  533. 
20  L.  T.,  Jy.  21,  191 7,  p.  7. 


FOOD 


177 


would  thus  be  thrown  out  of  work  and  that  a  valuable 
food  for  children  would  be  unavailable.^^  He,  there- 
fore, forbade  the  manufacture  of  such  chocolate  as  would 
sell  at  retail  for  more  than  3  d.  per  oz.  (4  s.  per  lb.)  or 
of  any  other  sweetmeat  which  would  sell  at  more  than 
2  d.  per  0Z.22  When  Mr.  Lloyd  George's  daughter  was 
married  in  June,  the  prohibition  relative  to  f rostings  had 
become  effective  and  the  bride's  cake  had  none  of  the 
customary  icing  and  sugar  decorations.^^ 

More  drastic  still  was  another  order  of  January  11, 
prescribing  that  no  manufacturer  of  sugar-confectionery 
or  chocolate  might  use  more  than  50  per  cent,  of  the  sugar 
used  by  him  during  corresponding  periods  of  191 5.     Two 
months  later  the  amount  was  reduced  to  40  per  cent,  and 
the  order  was  made  applicable  to  all  manufacturers  of 
articles  containing  sugar,  other  than  manufacturers  of 
jam,  marmalade,  and  condensed  milk.     After  two  months 
more  had  passed,  the  ration  was  reduced  still  further  to 
25  per  cent,  of  the  amounts  used  in  191 5,  and  this  was  to 
become  effective  after  June  i.^*     It  could  scarcely  be 
said  henceforth  that  confectioners  and  their  patrons  were 

unduly  favoured. 

Another  grievance  of  1916  had  been  that  little  sugar 
could  be  had  for  home-made  jams.  In  May,  1917,  the 
Government  set  apart  a  certain  amount  of  sugar  for  pre- 
serving fruit  and  speedily  250,000  letters  asked  for  ap- 

21  M.  G.,  May  2,  1917. 

22  D.  R.  M.,  3rd.  ed.,  p.  244. 

23  M.  G.,  Je.  22,  1917. 

24  D.  R.  M.,  3rd  ed.,  pp.  244,  421 ;  M.  G.,  May  31,  ^9i7- 


178 


WAR    TIME    CONTROL    OF    INDUSTRY 


plication  blanks.  Toward  the  end  of  June,  the  Commis- 
sion made  its  allotments.  But  only  fruit  growers  could 
be  supplied,  no  balance  remaining  for  those  who  wished 
to  purchase  fruit  for  domestic  jam-making.  The  sink- 
ing of  sugar  cargoes  and  the  overwhelming  need  of 
economizing  tonnage  compelled  such  action.  To  the  ap- 
peals for  apportionments  which  continued  to  come  in  the 
Commission  replied  curtly  that  the  letters  were  wasted; 
and  it  was  only  left  for  the  Times  to  insist  that  the  Gov- 
ernment had  never  understood  how  much  jam  w^as  habitu- 
ally made  at  home  and  to  what  extent  home-made  jams 
were  preferred.  What  the  Government  actually  did  as  a 
pis  allcr  was  to  train  and  send  out  from  the  Food  Produc- 
tion Department  instructors  who  might  teach  people  to 
preserve  fruit  without  sugar.  Instruction  was  free  and 
it  was  hoped  that  the  learners  might  pass  the  knowledge 
on.  The  Department  even  made  arrangements  with  the 
Ministry  of  Munitions  to  supply  botdes  for  preserving 
fruit  and  vegetables. ^^ 

It  was  at  this  time  that  the  Royal  Commission  took 
action  in  line  with  its  policy  of  early  1916.  Willing  to 
limit  consumption  and  impelled  by  increasing  costs,  it  ad- 
vanced the  price  of  wholesale  sugar  on  May  30,  1917,  by 
5  s.  per  cwt.  To  the  consumer  this  meant  a  rise  of  ^  d. 
a  pound,  and  the  price  accordingly  touched  6  d.^^  The 
pre-w^ar  cost  had  trebled. 

The  last  and  most  difficult  phase  of  the  problem  of  the 

25  L.  T.,  May  28,  1917,  p.  3. 

26  M.  G.,  May  31,  1917. 


FOOD 


179 


distribution  of  food,  that  relating  to  equitable  apportion- 
ment of  the  supply  among  households,  received  in  the 
summer  of  19 17  the  prompt  consideration  of  the  new 
Food  Controller,  Lord  Rhondda.  The  essence  of  his 
solution  was  local  control.  Three  principles,  he  declared 
further,  would  guide  him.  Supplies  of  food  must  be 
conserved,  they  must  be  shared  equally  by  rich  and  poor, 
and  prices  must  be  kept  down.  That  the  public  might 
know  the  need  for  economy,  information  about  supplies 
would  from  time  to  time  be  published. 

His  plan,  as  applicable  to  sugar,  was  announced  early 
in  August.  Local  authorities  (the  Common  Council  of 
the  City  of  London,  Metropolitan  Borough  Councils, 
Municipal  Borough  Councils,  Urban  and  Rural  District 
Councils)  were  instructed  each  to  appoint  Food  Control 
Committees  of  not  more  than  twelve  members.  Some  of 
the  members  might  be  co-opted;  one  at  least  must  be  a 
woman  and  one  a  representative  of  labour.  The  ex- 
penses of  the  Committees  would  be  a  charge  upon  the 
Exchequer ;  for  they  would  need  a  special  staff,  including 
inspectors  to  watch  out  for  evasions  of  the  new  regula- 
tions. The  penalty  for  evasion  was  a  heavy  fine,  with 
imprisonment  and  hard  labour.^^ 

The  rationing  scheme  which  these  Food  Control  Com- 
mittees were  to  put  into  practice  and  which,  it  was  hoped, 
would  remedy  faulty  distribution,  affected  primarily  re- 
tail dealers  and  householders.  No  sugar  might  after 
October  i  be  sold  at  retail  except  by  dealers  registered 

27  L.  T.,  Aug.  6,  1917,  PP-  4,  7. 


i8o 


WAR    TIME   CONTROL   OF    INDUSTRY 


with  the  Local  Food  Control  Committee.  To  all  such 
there  would  be  a  reapportionment  of  supplies  before 
December  30.  What  allotment  each  dealer  might  secure 
would  depend  upon  the  number  of  households  which 
meanwhile  declared  themselves  his  patrons.  Each  house- 
hold in  a  community,  accordingly,  was  required  to  get 
from  the  local  food  ofhce  a  sugar  registration  card,  a  por- 
tion of  which  must  be  deposited  with  the  retail  dealer. 
Once  a  week  but  not  oftener  the  household  might  obtain 
its  allowance.  When  record  of  this  had  been  made  on 
the  card  deposited  with  the  retailer,  the  card  might,  it 
was  suggested,  be  transferred  from  one  box  to  another. 
Weekly  allowances  would  vary,  according  to  the  increase 
or  decrease  in  the  nation's  store.  The  customer  need 
not,  of  course,  buy  his  weekly  allowance,  though  he  could 
not  defer  taking  it  until  another  week.  Caterers  and 
others  supplying  food  would  have  their  allowances  deter- 
mined by  the  number  of  meals  they  served  and  by  such 
other  needs  as  they  met.  Only  with  the  authority  of  the 
Local  Food  Control  Committee  could  they  after  Novem- 
ber 4  get  supplies,  and  these  would  be  apportioned  for  no 
longer  than  four  weeks. 

As  soon  as  this  scheme  was  put  into  operation,  however, 
it  was  found  that  changes  in  the  composition  of  a  house- 
hold and  the  necessary  travel  of  many  persons  involved 
duplication  of  supplies.  Household  registration,  there- 
fore, had  to  give  way  to  individual  registration.  Reluc- 
tantly the  food  ticket  made  its  appearance,  although  cou- 


FOOD 


181 


pons  were  attached  only  for  travellers.  Travellers  might, 
henceforth,  buy  their  ration  from  any  grocer,  but  perma- 
nent residents  were  to  proceed  as  under  household  regis- 
tration. Should  a  general  scheme  of  compulsory  ration- 
ing become  unavoidable,  experience  would  have  been  got, 
it  was  felt,  from  the  sugar  cards.^^ 

It  thus  appears  that  the  Government's  control  over  the 
refining  and  distribution  of  sugar  has  from  the  first  been 
more  complete  than  its  control  elsewhere  in  the  realm  of 
industry  except  with  regard  to  the  railways.  At  the  be- 
ginning of  the  war  access  to  the  supply  of  raw  sugar  was 
forbidden  to  private  enterprise;  prices  were  promptly 
fixed  and  have  since  been  changed  at  will;  taxes  have 
incidentally  been  collected  from  all  consumers ;  finally  an 
imperfect  scheme  of  distribution  has  been  replaced  by  a 
more  equitable  one.  The  steady  shrinkage  of  available 
stores  has,  furthermore,  turned  this  scheme  of  distribu- 
tion into  a  rationing  of  the  population,  the  first  imposition 
in  Great  Britain  of  compulsory  economy. 

MEAT 

In  certain  respects  the  meat  supply  of  the  United  King- 
dom is  like  the  wool  supply.  There  is  in  each  case  a 
considerable  home  product  but  one  by  no  means  large 
enough  to  meet  the  demand.  Ultimate  reliance  is  upon 
imports,  which,  as  it  happens,  come  largely  from  the 
southern  hemisphere.     During  the  war,   moreover,   the 

28  Ibid.,  Nov.  24,  p.  3. 


I 


1 82 


WAR   TIME   CONTROL   OF    INDUSTRY 


demands  of  the  army  for  both  meat  and  clothing  have 
encroached  upon  civiHan  suppHes,  and  any  hardship  aris- 
ing from  shortage  falls  eventually  upon  the  civilian  con- 
sumer. 

Differences  between  the  meat  trade  and  the  wool  trade 
have  also  made  themselves  apparent  during  the  war. 
Governmental  interference  in  normal  traffic  became  im- 
perative sooner  in  the  case  of  meat  than  in  the  case  of 
wool ;  but,  on  the  other  hand,  it  affected  first  the  imported 
supply.  Not  until  more  than  a  year  after  prices  had 
been  fixed  for  the  domestic  output  of  wool  w^as  similar 
action  taken  regarding  domestic  meat.  The  latter  policy, 
too,  met  with  more  opposition  than  did  the  former,  owing 
largely  to  dissastisfaction  with  the  prices  set.  In  meeting 
its  own  needs  the  Government,  further,  in  the  case  of  wool 
appropriates  first  the  home  supply,  leaving  a  part  of  the 
imported  product  for  the  civilian  trade;  in  the  case  of 
meat  it  uses  first  the  foreign  supply,  leaving  a  large  part 
of  the  home  proauct  and  at  times  all  of  it  for  civilian 
consumption. 

From  the  beginning  of  the  war  the  Government  has 
been  concerned  to  maintain  the  home  production  of  meat. 
In  order  that  the  large  number  of  cattle  in  the  country 
might  be  fed  during  the  winter,  it  prohibited  in  September, 
1914,  the  exportation  of  feeding  stuffs  without  licence. 
The  August  rise  in  the  price  of  these  foods  had  led  some 
farmers  to  sell  their  cattle  and  poultry  prematurely.  As- 
surance was,  therefore,  given  that  the  supply  of  feeding 


FOOD  183 

stuffs  in  the  country  was  abundant  and  that,  if  prices  did 
not  remain  normal,  exportation  would  be  entirely  pro- 
hibited. Since  bran  was  particularly  abundant  and 
cheap,  farmers  were  urged  to  use  it  more.^^ 

The  endeavour  to  maintain  the  number  of  live  stock 
at  a  high  level  was  successful.  Agricultural  returns  of 
June,  19 1 6,  showed  2  per  cent,  more  cattle  and  sheep  in 
the  United  Kingdom  than  a  year  before  when  the  num- 
ber was  practically  unchanged,  and  in  the  summer  of 
1917  there  were  still  as  many  head  as  before  the  war.^^ 
Soon  after  the  latter  date,  however,  farmers,  for  reasons 
to  be  explained  later,  threatened  to  kill  off  their  stock. 

By  the  spring  of  191 5  the  Government  had  turned  its 
attention  to  the  supply  of  imported  meat  and  for  more 
than  two  years  this  was  its  chief  concern.  About  40  per 
cent,  of  the  meat  consumed  in  the  United  Kingdom  is,  in 
normal  times,  imported.  This  it  was  that  could  most 
readily  be  diverted  to  the  needs  of  the  army,  and  such  w^as 
the  policy  at  once  adopted.  Military  needs  proved  to 
be  very  great.  Not  only  did  the  men  of  the  British 
army  eat  more  meat  than  they  did  in  times  of  peace  and 
army  cooks  prove  more  wasteful  than  housewives,  but 
the  French,  and  eventually  the  Italian,  Government  de- 
cided to  add  meat  to  the  soldier's  ration.  It  was  a 
departure   from   the  usage  of  both  countries,   bringing 

2»  B.  T.  J.,  Sept.  10,  1914,  p.  674 ;  Sept.  17,  p.  748. 
30  L.  E.,  Feb.  17,  1917,  p.  302;  P.  D.  L.,  Aug.  2,  1917  (L.  T.,  Aug. 
3,  p.  8). 


1 84 


WAR    TIME    CONTROL    OF   INDUSTRY 


them  as  competitors  into  the  world  market.  The  Brit- 
ish Government  saw  that  it  would  soon  be  forced  to  buy 
in  markets  where  demand  might  readily  outrun  supply 
and  where  an  alarming  advance  in  prices  might  take 
place.  Luckily,  imported  meat  came  from  Australasia, 
and  the  co-operation  of  the  Colonial  Governments  could 
be  relied  upon.  Without  hesitation  these  Governments 
took  control  of  all  beef  and  mutton  exported,  allowing 
producers  a  profit  of  lo  per  cent.  At  a  price,  equivalent 
to  the  cost  of  production  increased  by  this  percentage  of 
profit,  the  home  Government  took  over  these  supplies.^^ 
Unfortunately,  however,  the  drought  of  19 15  gready 
curtailed  the  Australasian  output  and  it  became  necessary 
to  rely  upon  the  product  of  South  America. 

The  importation  of  meat  from  the  River  Plate  is  in 
the  hands  of  seven  firms.  Two  of  them  are  British,  one 
is  native,  and  the  others  are  commonly  believed  to  be 
owned  or  controlled  by  large  meat  packers  in  the  United 
States.^2  With  these  firms  the  Board  of  Trade  began 
to  treat,  but  found  their  prices  excessive.  The  shipping 
companies,  too,  demanded  very  high  freights,  practically 
2j^  d.  a  pound  from  the  Argentine.  To  curb  such  de- 
mands, the  Government  had  one  effective  rein.  The 
ships  which  carried  South  American  meat  were  British- 
owned.  To  put  itself  in  control  of  the  situation  the 
Ministry,  accordingly,  in  April,  191 5,  requisitioned  all 
insulated  spaces  in  British  steamships  trading  with  Ar- 

31  P.  D.  C,  1915,  LXXIV,  493.     Mr.  Runciman's  speech  on  Sept.  22. 

32  Cd.  8358.     First  Interim  Report  on  the  Increase  in  the  Prices 
of  Commodities.    Meat,  Milk,  and  Bacon.    Sept.  29,  1916. 


FOOD 


185 


gentina  and  Uruguay,  having  already  taken  similar  ac- 
tion regarding  vessels  trading  with  Australasia.^^  The 
measure  affected  space  for  450,000  tons  of  meat  from  the 
River  Plate  and  for  a  still  greater  amount  from  Austral- 


34 


asia. 

Straightway  shipowners  and  the  "  meat  trust "  ac- 
cepted new  terms.  Freight  rates  were  cut  from  2^  d. 
a  pound  to  ^  d. ;  the  price  of  beef  became  nearly  2  d.  a 
pound  less  than  the  price  asked  by  the  beef  companies.^^ 
Under  its  earlier  contracts  with  the  companies,  the  Gov- 
ernment had  paid  the  price  ruling  in  the  market  during 
the  week  after  the  landing  of  the  meat.  By  its  new  con- 
tract for  the  period  from  May  i,  191 5,  to  June  30,  19 16, 
the  price  agreed  upon  was  only  a  little  higher  than  the 
average  of  the  prices  previously  paid  and  was  actually 
lower  than  the  price  of  the  moment.  The  quantity  con- 
tracted for,  too,  was  double  that  of  the  earlier  agree- 
ments. This  arose  from  the  fact  that  the  Allies  had 
decided  to  make  their  purchases  as  a  unit  and  the  British 
Government  had  been  designated  to  act  for  them  all.^^ 
The  actual  negotiations  were  put  into  the  hands  of  busi- 
ness men,  questions  of  price  being  referred  in  particular 
to  Sir  Thomas  Robinson,  Agent-General  for  Queens- 
land.37 

33  Cf.  above  p.  147. 

3*  P.  D.  C,  1916,  LXXXVI,  499. 

35  Ibid.,  1915,  LXXIV,  493. 

36  Cd.  8358. 

37  p.  D.  C,  1916,  LXXXVI,  498.    Mr.  Runciman's  speech  of  Oct. 
17. 


1 86 


WAR    TIME   CONTROL   OF   INDUSTRY 


By  this  transaction  the  Government  secured  its  sup- 
pHes  at  a  reasonable  cost  and,  so  far  as  there  remained  a 
surplus  to  put  on  the  market,  it  was  in  a  position  to  ex- 
ercise a  steadying  influence  upon  prices  in  the  civilian 
trade.  For  its  own  expenses  in  getting  beef  and  mutton 
from  Australasia  it  charged  only  i^/^  d.  or  i^  d.  per 
tb.^^  Instead  of  allowing  the  surplus  of  imports  to  fall 
into  the  hands  of  speculators,  it  appointed  a  committee 
of  three  business  men  familiar  with  the  trade  to  un- 
dertake distribution  through  retail  channels.  Avoiding 
sales  to  middlemen,  the  committee  sold  the  surplus  di- 
rectly to  distributors,  who,  in  turn,  were  restricted  as  to 
what  they  might  add  to  the  price. ^^ 

On  the  expiration  of  the  fourteen  months'  contract, 
another  was  entered  into,  providing  for  a  purchase  still 
larger  than  the  former  one,  and  at  prices  7  per  cent, 
higher  than  had  been  paid.  This  contract  will  run 
until  three  months  after  the  war,  subject  to  three  months' 
notice  on  either  side.  Save  for  a  certain  amount  of 
meat  imported  by  the  companies  on  private  account,  it 
embraces  the  entire  production  from  the  flocks  and  herds 
of  Argentina  and  Uruguay.  Experts  consider  that  on 
the  whole  the  Government  buying  has  been  economical.*^ 
So  far  as  public  access  to  the  imported  supply  is  con- 
cerned, the  President  of  the  Board  of  Trade  declared 
in  October,  1916,  that  no  evidence  of  any  exploitation 

38  L.  T.,  Je.  25,  1917,  p.  7;  Je.  26,  p.  7. 
89  p.  D.  C,  1916,  LXXXVI,  498. 
*o  Cd.  8358. 


FOOD  187 

whatever  had    come   before   the   Board's   investigating* 
committee.*^ 

However  efficiently  the  Government  may  have  bought, 
it  could  not  in  the  end  escape  the  problems  created  by 
the  rising  prices  of  meat.  On  August  8,  19 14,  prices  of 
meat  in  England  had  advanced  15  per  cent,  but  in  Sep- 
tember they  fell  back  one-third  of  this  amount.  Since 
then  their  rise  was  continuous,  registering  advances  upon 
pre-war  prices  of  35  per  cent,  in  September,  19 15,  65 
per  cent,  in  September,  19 16,  and  about  85  per  cent,  in 
September  of  1917.*^ 

Behind  the  steady  advance  lay  certain  explicable 
causes.  In  spite  of  the  restrictions  upon  the  exporta- 
tion of  feeding  stuffs,  the  prices  of  such  stuffs  rose,  until 
linseed  cake,  for  example,  advanced  from  £8  5  s.  10  d.  to 
£12  15  s.  9d.  in  two  years.  Owing  to  the  shortage  of 
labour,  the  wages  of  agricultural  labourers  had  to  be  in- 
creased. Above  all,  perhaps,  civilian  demands  upon  the 
home  supply  became  more  insistent  than  ever  before. 
This  was  indirectly  due  to  the  large  consumption  of  the 
Allied  armies.  One  expert  calculated  that,  whereas  im- 
ported meat  formerly  constituted  40  per  cent,  of  the 
amount  consumed  in  the  United  Kingdom,  after  two 
years  of  war  the  demands  of  the  army  had  reduced  the 
percentage  to  20  per  cent.''^  By  the  summer  of  19 17 
this  figure  had  fallen  to  10  per  cent.**     The  home  sup- 

*i  P.  D.  C,  1916,  LXXXVI,  499. 

*2Cd.  8358.    L.  T.,  Oct.  17,  1916,  p.  4. 

*3  Cd.  8358. 

**  L.  T.,  Sept.  7,  1917,  p.  8.    Lord  Rhondda's  statement. 


1 88 


WAR    TIME   CONTROL   OF    INDUSTRY 


ply  more  and  more  had  to  suffice  for  civilian  needs. 
Since  it  did  not  increase  in  amount,  only  economy  in  con- 
sumption could  meet  the  situation. 

Some  economy  seems  to  have  been  attained  by  the 
autumn  of  191 6,  possibly  to  the  extent  of  one-sixth  of 
the  meat  formerly  consumed."*^  Rising  prices  probably 
lay  behind  this,  but  in  April,  191 7,  the  Food  Controller 
decided  to  try  the  efficacy  of  another  device.  The  ob- 
servance of  a  meatless  day  was  ordered."*^  After  a  few 
weeks,  however,  it  became  clear  that  such  economizing 
of  meat  resulted  only  in  a  greater  consumption  of  bread. 
Inasmuch  as  there  was  at  the  time  a  relatively  greater 
supply  of  meat  in  the  country  than  of  cereals,  the  meat- 
less day  was  discontinued,  and  consumption  w^as  left  free 
from  direct  regulation."*^  Consumption,  however,  w^as 
indirectly  dependent  upon  prices,  and  these  at  length  re- 
ceived further  official  attention. 

The  rise  in  prices,  as  it  happened,  had  been  somewhat 
less  for  home-grown  meat  than  for  the  imported  prod- 
uct. From  July,  1914,  to  Septeml)er,  1916,  British  beef 
advanced  in  price  60  per  cent,  (ribs)  and  80  per  cent, 
(thin  flank),  chilled  or  frozen  beef  80  per  cent,  (ribs) 
and  97  per  cent,  (thin  flank)  ;  British  mutton  advanced 
55  per  cent,  (legs)  and  80  per  cent,  (breast),  frozen 
mutton  84  per  cent,  (legs)  and  117  per  cent.  ( breast ).^^ 

*5  Cd.  8358. 
*«L.  T.,  Apr.  3,  191 7. 
*7  M.  G.,  May  i,  191 7. 
"  Cd.  8358. 


I 


FOOD 


189 


Despite  the  smaller  increase  in  the  price  of  the  home 
product,  the  profits  of  home  producers  and  dealers  were 
substantial  and  by  19 17  popular  criticism  began  to  be 
directed  against  them.*^  Impelled  by  this  criticism,  the 
Government  first  restricted  the  profits  of  wholesalers. 
After  May  31  they  were  forbidden  to  take  a  profit  of 
more  than  3  d.  on  the  stone  of  8  Ibs.*^^  A  little  later  a 
new  official  interest  developed  and  price  fixing  in  the 
domestic  meat  trade  began. 

The  new  interest  arose  from  the  fact  that  at  the  end 
of  the  summer  of  19 17  the  Government  for  the  first 
time  foimd  itself  compelled  to  feed  a  portion  of  the  army 
and  navy  on  home-grown  meat.  For  this  purpose,  it 
appeared,  there  would,  in  September,  be  need  of  150,000 
cattle  from  Great  Britain  and  100,000  from  Ireland.^^ 
That  such  demands  might  not  disorganize  the  trade  and 
dislocate  prices,  it  was  decided  that  domestic  beef  as 
well  as  imported  meat  should  come  under  state  control. 
In  July  the  Food  Controller  announced  that  from  Sep- 
tember I  certain  maximum  prices  would  be  paid  for  live 
cattle  bought  for  the  use  of  the  army  and  that  these 
maxima  would  soon  be  applied  to  the  entire  home  supply. 
The  scale  was  graduated.  In  September  the  price  was 
to  be  74  s.  per  cwt,  in  October  J2  s.,  in  November  and 
December  67  s.,  in  and  after  January,  1918,  60s.  Such 
cautious  reduction  was  proposed  in  order  that  the  farmer 

*»L.  E.,  Feb.  17,  1917,  p.  302;  L.  T.,  Je.  26,  1917,  p.  7. 

50  L.  T.,  Je.  I,  1917. 

51  L.  T.,  Jy.  23,  1917,  p.  3. 


190 


WAR    TIME   CONTROL   OF   INDUSTRY 


might  adjust  himself  with  as  Httle  loss  as  possible  to  the 
new  conditions. ^^ 

Although  the  September  price  was  below  market  quo- 
tations, it  was  felt  that  this  and  the  other  autumn  prices 
were    tolerable.     The    January    figure,    however,    was 
criticized,  as  discouraging  to  farmers  and  likely  to  in- 
duce them  to  sell  their  stock  prematurely.     In  the  Lords, 
the  Earl  of  Kimberley  said  that  the  farming  community 
were  dumbfounded  by  the  new  prices,  especially  by  that 
for  January  and  later  months.     Some  farmers  had  al- 
ready ploughed  up  their  young  turnips,  put  in  for  fodder, 
and  had  sown  wheat  instead.     Farmers  did  not  mind  a 
small  loss,  but  one  of  £7  or  £8  on  a  bullock  after  January 
I   was  too  much.     To  this  the  Food   Controller,  Lord 
Rhondda,  answered  that  60s.,  the  price  for  1918,  was 
63  per  cent,  above  the  price  of  January,  19 14.     Wages 
of  agricultural  labourers  had  increased  by  about  50  per 
cent.,  the  cost  of  roots  and  feeding  stuffs  had  not  gone 
up  more,  the  payment  for  wool,  now  under  Government 
control,  was  only  50  per  cent,  above  pre-war  quotations, 
rents  had  not  increased,  and  prices  in  general  were  only  63 
per    cent,    above    those   of    1914.     The    farmer   should 
therefore  be  content.^^ 

To  make  the  farmer  more  content,  Mr.  Prothero,  the 
President  of  the  Board  of  Agriculture,  explained  the 
new  regulations  to  a  Scottish  agricultural  society  which 
was  voicing  its  disapproval.     He  recognized  the  preva- 

52  Ibid.,  Jy.  21,  p.  6. 
^  Ibid.,  Aug.  3,  p.  8. 


FOOD 


191 


), 


tf 


lent  dissatisfaction  of  the  farmers  with  the  maximum 
prices  and  admitted  that  he  would  have  liked  to  see  them 
higher.  Indeed,  as  Lord  Rhondda  had  stated  in  the 
Lords,  the  Board's  proposed  prices  were  higher  than 
those  which  the  Food  Controller  himself  had  adopted. 
Mr.  Prothero  reminded  the  farmers,  however,  that  the 
community  at  large  was  restive  under  the  high  price  of 
meat  and  that  agriculture  was  likely  to  suffer  "  in  that 
they  were  setting  up  a  bitter  and  indiscriminating  cur- 
rent of  public  opinion  "  against  themselves.  It  would 
be  best  to  think  twice  before  they  showed  such  resent- 
ment as  to  make  no  further  effort. 

As  for  the  seemingly  premature  sale  of  cattle,  he  con- 
tinued, that  was  what  the  Government  now  desired. 
Cattle  for  the  army  should  be  like  those  got  from  the 
Argentine,  not  yet  brought  "to  the  degree  of  finish 
which  in  the  past  has  reflected  such  credit  on  British 
graziers  and  has  supplied  our  public  with  the  finest  meat 
in  the  world.  Prime  beef  is  no  longer  economical  for 
the  country  at  large.  The  last  stages  of  fattening  are 
the  most  expensive  in  food."  In  other  words,  more 
feeding  stuff  is  consumed  to  create  an  additional  pound 
of  beef  in  the  later  than  in  the  earlier  stages  of  feeding. 
So  reduced  had  shipping  tonnage  been  by  the  submarine 
that  little  of  it  could  be  spared  for  cattle  food.  It  would 
be  the  business  of  the  Department  of  Agriculture  to  see 
that  the  reduction  in  stock  was  not  carried  to  the  danger 
point  and  to  protect,  as  the  most  valuable  element  in 
future  reconstruction,  the  pedigree  flocks  and  herds.^* 

54  Ibid.,  Aug.  7,  p.  3. 


192 


WAR    TIME    CONTROL   OF   INDUSTRY 


The  recommendation  that  cattle  and  sheep  should  be 
slaughtered  in  a  much  less  fat  condition  than  had  been 
customary  was  further  developed  in  a  little  book  by 
Professor  T.  B.  Wood,  head  of  the  Cambridge  School 
of  Agriculture.  In  this  way  would  feeding  stuffs,  he 
argued,  best  be  economized,  demand  and  supply  best  be 
equalized.'^^ 

Despite  explanations,  protests  became  louder.  On 
September  6  the  Central  and  Associated  Chambers  of 
Agriculture  declared  that,  though  the  country  had  an 
excellent  President  of  the  Board  of  Agriculture,  the 
Government  did  not  give  him  the  consideration  deserved. 
They  pointed  out  that  in  every  town  whence  reports  had 
come,  animals  were  already  being  put  on  the  market 
weighing  three  hundredweight  less  than  usual,  and  they 
passed  a  resolution  that  the  price  fixed  for  home  beef 
ought  to  be  70s.  from  October  i  to  January  i,  1918.^^ 
On  September  17  four  hundred  representative  butchers 
expressed  serious  apprehension  for  the  meat  supply  of 
the  coming  winter  and  spring.  One  dealer  from  Man- 
chester reported  that,  whereas  he  ordinarily  got  twenty- 
five  lambs  a  week,  he  had  not  been  able  of  late  to  get 
more  than  two.^^  Finally,  Mr.  Prothero  in  a  speech  at 
Darlington  on  October  5  professed  his  conviction  that 
at  current  prices  arable  farmers  who  might  stall,  feed,  or 
fatten  cattle  for  winter  markets  would  make  small  profits, 

^5  The  National  Food  Supply  in  Peace  and  War.    Camb.  Univ. 
Press.     Cf.  L.  T.,  Aug.  7,  191 7,  p.  3. 
5«  L.  T.,  Sept.  7,  1917,  p.  8. 
57  Ibid.,  Sept.  18,  p.  6. 


FOOD 


193 


if  they  made  any  at  all.  There  was,  he  said,  no  longer 
any  point  in  debating  the  wisdom  of  three-fourths  fat- 
tening; supplies  sufficient  for  anything  else  could  not  be 
had.  Whereas  the  live  stock  of  the  country  usually 
consumed  over  eleven  million  tons  of  feeding  stuffs,  this 
year  there  would  be  available  only  about  six  million  tons, 
and  the  greater  part  of  this  would  have  to  be  devoted  to 
dairy  cattle.  In  many  parts  of  the  country  preparations 
for  winter  feeding  were  suspended,  neither  cake  nor 
stores  being  purchased. ^^ 

In  view  of  the  almost  universal  disapproval  of  his 
prices.  Lord  Rhondda  yielded  somewhat.  On  October 
9  he  announced  that  the  War  Cabinet  had  responded  to 
the  appeal  of  the  farmers.  The  November  and  Decem- 
ber prices  of  67  s.  per  live  cwt.,  instead  of  being  reduced 
to  60s.  on  January  i,  1918,  would  be  continued  until 
July  I.  After  that  the  60s.  maximum  would  become 
operative.^^ 

While  the  farmers  were  thus  voicing  their  protests, 
the  Government  on  August  29  adapted  its  schedule  of 
prices  for  army  beef  to  beef  for  civilian  consumption  and 
added  regulations  affecting  retail  prices.  The  new 
schedule  maxima  were  for  dead  weight  rather  than  live 
weight,  but  were  otherwise  like  those  already  announced. 
Retail  prices  were  to  conform  to  them.  No  retailer 
might  sell  beef  at  prices  higher  than  those  which  he  had 
paid  by  more  than  2^^  d.  per  lb.  or  by  more  than  20  per 

58  Ibid.,  Oct.  6,  p.  8. 
69  Ibid.,  Oct.  10,  p.  7. 


0 


194 


WAR    TIME    CONTROL   OF    INDUSTRY 


cent,  on  his  fortnight's  purchase,  whichever  increase 
might  be  the  smaller.  All  expenses,  as  well  as  profits, 
were  included  in  this  permitted  increase.  Inasmuch  as 
local  conditions  of  purchase  would  differ,  the  Local  Food 
Control  Committees  were  empowered  to  fix  schedules  of 
maximum  retail  prices  for  the  various  points  in  their 
respective  localities.  If  any  butcher,  relying  upon  a 
large  turnover,  was  already  content  with  a  smaller  mar- 
gin of  profit  than  the  one  announced,  the  Local  Food 
Committee  should  fix  prices  on  this  basis.  The  prices 
fixed  butchers  must  keep  posted  in  their  shops.^*^  For 
another  reason  retail  prices  in  different  localities  might 
differ.  If,  for  instance,  a  West  End  butcher  in  London 
were  to  sell  his  choice  cuts  at  a  high  price,  he  would  have 
to  sell  the  other  parts  of  the  carcass  at  a  low  rate  to 
keep  within  the  average  price  prescribed  by  the  order. 
In  working  class  districts  where  the  demand  is  for 
cheaper  cuts,  the  better  ones  could  be  sold  at  a  relatively 
moderate  price.^^  It  was  estimated  that  the  average  re- 
tail price  for  home-killed  beef  and  mutton  would  work 
out  at  about  i  s.  3>^  d.  per  Ib.,^^  and  during  the  month 
of  September  prices  for  domestic  beef  and  mutton  did 
decline  by  ij4  d.  and  2(1.  respectively.*^^  Retailers  and 
consumers  expressed  satisfaction  with  the  Government's 
new  measure. 

<50  Ibid.,  Sept.  3,  p.  8;  Oct.  22,  p.  3. 

61  Ibid.,  Sept.  I,  p.  7. 

62  Ibid.,  Aug.  31,  p.  8. 
es  Ibid.,  Oct.  16,  p.  3- 


FOOD 


195 


) 


) 


The  situation,  however,  from  the  national  point  of 
view  remained  serious  enough,  as  Mr.  Prothero  pointed 
out.  If  account  were  taken  of  all  two-year  old  cattle 
available  on  September  4  and  allowance  made  for  their 
reduced  weight  and  for  the  usual  number  of  cows  added 
to  them  from  the  dairy  herds,  the  45,000,000  lbs.  of  beef 
normally  consumed  to  the  time  when  cattle  again  begin 
to  come  off  the  summer  grass  could,  indeed,  be  supplied. 
But  in  May  or  June  of  19 18  beef  and  mutton  were  likely 
to  run  short.  This  contingency  could  be  avoided  by 
the  slaughter  of  an  increased  number  of  cows,  heifers, 
or  veal  calves  —  a  dangerous  proceeding;  it  could  be 
forestalled  by  the  importation  of  more  beef,  a  resource 
which  did  not  lie  in  English  hands ;  it  could  be  obviated, 
finally,  by  a  reduction  in  consumption,  the  only  remedy 
which  was  safe  and  within  control.^^  The  last  word 
here,  as  with  other  kinds  of  food  and  as  with  coal,  wool, 
and  leather,  was  an  appeal  to  the  customer.  Mainly  by 
his  economy  could  the  crisis  be  met  and  the  situation 
saved. 

At  the  same  time  that  the  Government  exerted  its 
control  over  the  domestic  nreat  supply  by  fixing  maxi- 
mum prices  for  beef,  mutton,  and  pork,  it  turned  also  to 
the  imported  supply  of  bacon,  ham,  lard,  and  butter. 
Prices  of  these  commodities  were  less  amenable  to  con- 
trol. The  best  that  the  Government  could  do  w^as  to 
repeat  its  exploits  relative  to  sugar  and  wheat.     It  could 

6*  Ibid.,  Oct.  6,  p.  8. 


1 


196 


WAR   TIME    CONTROL   OF    INDUSTRY 


itself  enter  the  market  as  purchaser  and  could  so  distrib- 
ute the  imported  product  that  the  public  would  pay  no 
undue  middleman's  profit. 

The  situation  regarding  bacon  was  in  the  early  au- 
tumn of  19 1 7  acute,  and  it  seemed  impossible  by  any 
device  to  avoid  temporary  shortage.  Supplies  from 
Sweden  and  Holland  had  been  almost  cut  off,  while  those 
from  Denmark  had  been  materially  curtailed.  In  North 
America,  which  would  now  have  to  be  largely  relied  upon, 
the  number  of  hogs  had  been  reduced,  and  the  home  de- 
mand for  them  had  increased  owing  to  army  needs.^^ 
To  facilitate  purchases  of  bacon,  ham,  and  lard  there, 
the  Ministry  of  Food  from  Septeml>er  3  began  to  buy 
through  a  single  agency.  At  home  a  Meats  and  Fats 
Executive,  modelled  on  the  lines  of  the  Royal  Wheat 
Commission,  was  created  to  buy  bacon,  ham,  lard,  but- 
ter, and  cheese  for  Great  Britain,  France,  and  Italy.  At 
once  it  secured  several  thousand  tons  of  bacon  and  soon 
it  had  a  mission  under  w^ay  to  set  up  in  New  York  its, 
permanently  organized  executive.^^ 

The  supplies  once  secured,  the  Government  prepared 
to  distribute  them  through  the  ordinary  channels,  allow- 
ing suitable  profits  as  commission.  Since  March,  the 
prices  of  bacon,  ham,  lard,  and  butter  had  been  deter- 
mined by  importers',  manufacturers',  and  curers'  prices, 
set  every  fortnight.  The  Government  now  proposed,  as 
from   August    30,    to   fix    maximum    importers'    prices, 

«5L.  T.,  Oct.  2,  1917,  p.  3. 
«eibid.,  Sept.  27,  p.  3. 


FOOD 


197 


\ 


, 


\ 


I 

i 


prices  which  would  necessarily  vary  as  foreign  market 
conditions  changed.  Wholesalers  and  retailers,  too, 
were  called  in  to  advise  about  the  determination  of  whole- 
sale and  retail  prices.  In  short,  the  regulation  already 
formulated  for  the  prices  of  domestic  meat  was,  so  far  as 
possible,  to  be  extended  to  imported  meat  products. 

By  the  end  of  19 17,  therefore,  the  state's  control  of 
the  meat  trade  was  as  complete  as  it  well  could  be.  Be- 
ginning in  191 5  with  the  purchase  of  imported  meat  for 
the  army,  the  Government,  by  requisitioning  all  insu- 
lated shipping  space,  assumed  control  of  most  of  the 
beef  and  mutton  imported  into  the  United  Kingdom. 
When  in  191 7  domestic  beef  was  also  needed  for  the 
army,  the  Government  indicated  the  prices  which  it 
would  pay.  Owing  to  the  complaints  of  consumers 
about  the  high  cost  of  meat,  it  extended  these  prices  to 
domestic  meat  produced  for  civilian  needs,  and  restricted 
carefully  the  profits  of  wholesalers  and  retailers. 
Lastly,  to  protect  the  consumer  still  further,  it  created 
an  agency  for  the  purchase  of  bacon,  ham,  and  lard  in 
New  York,  and  took  measures  that  no  middleman  or  re- 
tailer at  home  should  make  more  than  commission  profits 
on  these  imports.  The  risk  run  by  fixing  prices  for 
domestic  meat  was  the  possible  falling  off  of  production ; 
of  this  danger  the  Government  at  the  end  of  191 7  was 
sensible,  and  on  account  of  it  gave  to  the  prices  set  for 
beef,  mutton,  and  pork  most  careful  consideration.  Its 
next  step  promised  to  be  an  attempt  to  conserve  the  meat 
supply  by  restricting  consumption. 


198 


WAR   TIME   CONTROL   OF   INDUSTRY 


BREAD 

Since  the  price  of  bread  depends  upon  the  cost  of 
flour  and  the  price  of  flour  upon  the  cost  of  wheat,  the 
three  commodities  may  be  treated  as  one  subject.  In- 
creases in  the  price  of  wheat  will  be  accurately  reflected 
in  the  prices  charged  for  flour  unless  there  is  profiteering 
on  the  part  of  the  millers;  increases  in  the  price  of 
flour  will  be  accurately  reflected  in  the  prices  charged  for 
bread  unless  there  is  profiteering  on  the  part  of  the  bak- 
ers. If,  on  the  other  hand,  the  prices  of  bread  advance 
less  rapidly  than  do  those  of  flour  and  the  prices  of  flour 
less  rapidly  than  do  those  of  wheat,  the  explanation  is 
that  stores  of  wheat  and  flour  have  been  bought  by  con- 
tract on  relatively  favourable  terms  and  have  been  sold 
at  prices  based  on  those  terms.  This  has  happened  in 
England  during  the  war.  By  October,  19 16,  it  came  to 
pass  that  the  price  of  wheat  had  advanced  since  July, 
1914,  by  130  per  cent.,  the  price  of  flour  by  100  per  cent., 
while  the  price  of  bread  had  advanced  by  only  65  per 
cent.^^  There  would  seem  to  have  been  no  profiteering 
here;  and  it  crept  in  only  if  supplies,  bought  at  relatively 
low  prices,  were  sold  at  a  high  profit,  yet  one  which,  even 
so,  was  less  than  the  ruling  market  price  would  have 
warranted. 

Great    Britain    imports    roughly    four-fifths    of    the 

®^  Cd.  8483.  Second  and  Third  Reports  of  the  Committee  of  the 
Board  of  Trade  to  Investigate  the  Principal  Causes  which  have  led 
to  the  Increase  of  the  Prices  of  Commodities  since  the  Beginning 
of  the  War.     Nov.  15,  Dec.  30,  1916. 


FOOD 


199 


wheat  and  flour  which  her  people  consume.     At  the  out- 
break of  the  war  the  exportation  of  these  commodities 
was,   therefore,   prohibited.     Since  it  was  known  that 
the  supply  of  them  in  the  country  was  low,  an  excited  de- 
mand none  the  less  arose  and  quickly  had  its  inevitable 
effect  on  prices.     When,  however,  the  Board  of  Trade 
called  together  men  who  could  influence  retail  prices  of 
foodstuffs,  lending  its  own  sanction  to  their  action,  prices 
were  in  turn  steadied.^^     Moving  in  this  manner,  the 
spot  price  of  standard  wheat  (No.  i  Manitoba)  rose  and 
fell  in  London.     From  January  to  July,   19  H,  it  had 
averaged  37  s.  per  quarter  (8  bushels  or  496  pounds) ; 
but  early  in  September  it  advanced  to  50  s.,  only  to  fall 
back  by  mid-October  to  44  s. 

From  October,  however,  there  began  a  rise  in  the 
price  of  wheat,  which  was  not  counteracted  until  the  fol- 
lowing May.  During  the  intervening  period  wheat  sold 
at  73  s.  6d.  the  quarter,  an  advance  of  100  per  cent, 
over  the  average  price  of  the  first  half  of  1914.^^  Al- 
ready in  February,  1915,  complaint  was  loud  and  called 
forth  a  debate  in  Parliament.  Mr.  Asquith  there  ad- 
mitted that  the  price  of  wheat  had  increased  relatively 
more  than  that  of  any  other  necessity  of  life  except  sugar. 
If  comparison  were  made  with  the  prices  of  a  year  be- 
fore, i.  e.,  those  of  February,  1914,  wheat  would  be  found 
to  have  risen  72  per  cent,  flour  75  per  cent.,  sugar  72  per 
cent.,  British  meat  6  per  cent.,  foreign  meat  12  per  cent., 

68  Cf .,  above  p.  168. 
6«»  Cd.  8483. 


200 


WAR    TIME    CONTROL   OF    INDUSTRY 


coal  15  per  cent.     In  the  case  of  wheat  the  change  was 
due  to  increased  demand  and  deficient  supply.     To  this 
many  factors  had  contributed.     Men  in  the  new  armies 
ate  more  than  they  had  eaten  in  civil  life;  Italy,  Hol- 
land, and  France  had  bought  abnormally;  the  Australian 
crop  was  poor,  Australia  even  becoming  an  importing 
country;  parts  of  France  and  Belgium  had  been  devas- 
tated; the  Government  of   India  had  put  a  temporary 
embargo  upon  the  exportation  of  wheat;  bad  weather 
conditions  had  delayed  the  arrival  of  the  crop  from  Ar- 
gentina; above  all,  the  closing  of  the  Dardanelles  had  cut 
off  the  Russian  crop  so  that  some  10,000,000  quarters  of 
wheat  were  lying  in  Russian  ports.     Difficulties  of  trans- 
portation and  the  rise  of  freights,  the  Premier  thought, 
were  only  subsidiary  causes."^^     As  to  the  charge  that 
supplies  had  been  withheld  from  consumption,  the  Board 
of  Agriculture  and  Fisheries  declared  that  periodical  re- 
turns collected  since  the  outbreak  of  the  war  showed 
nothing  of  the  kind.     In  January  stocks  were  almost  ex- 
actly the  same  as  a  month  before,  and  English  wheat  had 
been  freely  offered  until  the  bad  weather  of  December 
hindered  threshing  J  ^ 

Before  the  high  prices  of  the  spring  of  19 15  began  to 
recede,  however,  the  balance  sheet  of  a  large  firm  of 
millers  in  South  Wales,  the  firm  of  Spillers  and  Bakers, 
was  published.  The  figures  were  sensational.  After 
paying  its  dividends  on  preference  and  ordinary  shares 

^0  p.  D.  C,  191S,  LXIX,  759-765. 
^1  B.  T.  J.,  Jan.  14,  1915,  p.  100. 


FOOD 


201 


(preferred  and  common  stock),  the  company  disbursed 
in  extra  dividends  £80,165,  or  17 J^  per  cent,  on  the  ordi- 
nary shares.  Yet  there  still  remained  from  the  year's 
earnings  £248,419,  a  sum  which  represented  a  further 
return  of  54  per  cent,  on  the  ordinary  shares."^ ^  To  the 
public  temper,  already  exasperated  by  the  increasing 
cost  of  living,  the  abnormal  profits  thus  disclosed  seemed 
convincing  evidence  that  profiteering  in  food  was  no 
myth.  Mr.  Runciman  could  only  admit  the  existence  of 
these  profits  while  he  deplored  them.  As  late  as  Sep- 
tember, he  reiterated  his  conviction  that  the  millers  as  a 
body  had  behaved  not  improperly.  Some  of  them  had 
made  a  good  deal  of  money  owing  to  forward  contracts 
of  the  autumn  of  19 14,  but  it  was  not  unlikely  that  these 
same  men  would  lose  a  good  deal  as  a  result  of  the  heavy 
fall  of  prices  which  had  already  taken  place  when  he 
spoke.^^  Despite  the  protestations  of  the  President  of 
the  Board  of  Trade,  the  popular  mind  long  remembered 
that,  while  many  of  the  poor  were  hard  pressed  to  pay 
for  food  in  the  winter  and  spring  of  1915,  certain  deal- 
ers in  wheat  and  flour  had  reaped  larger  profits  than  ever 
before. 

Apart  from  all  questions  of  profiteering,  however,  the 
situation  at  the  end  of  191 4  was  serious  enough  from  the 
national  point  of  view.  So  it  appeared  to  the  Cabinet 
Committee  which,  from  the  beginning  of  the  war,  had 
given  close  attention   to  the  nation's   store  of  wheat. 

72  L.  T.,  May  3,  1915,  p.  I4- 

"P.  D.  C,  1915,  LXXIV,  488;  LXXII,  420. 


k 


202 


WAR  TIME  CONTROL  OF  INDUSTRY 


FOOD 


203 


Now  that  there  was  still  risk  of  an  interruption  of  traffic 
across  the  Atlantic,  the  surplus  could  not  be  allowed  to 
fall  to  a  two-  or  three-weeks'  supply.  The  Government, 
therefore,  decided  to  purchase  a  national  reserve.  From 
November,  19 14,  until  the  following  February,  secretly 
and  through  the  agency  of  a  single  firm,  a  new  Grain 
Supplies  Committee  bought  extensively  in  the  United 
States  and  Argentina.  All  told,  it  purchased  some 
3,000,000  quarters  of  wheat  and  large  quantities  of  flour. 
This  method  of  acquisition,  which  involved  bidding 
against  home  importers,  later  called  forth  criticism;  but 
in  defence  it  was  urged  that  such  large  purchases  were 
at  best  bound  to  stimulate  prices,  that  the  Government 
had  acquired  nearly  all  its  store  before  its  buying  was 
realized,  and  that  events  at  length  fully  justified  the 
wisdom  and  the  extent  of  the  enterprise.*^^  Throughout 
the  spring  of  19 15  the  nation  at  least  knew  that  its  food 
supply  was  not  imperilled,  while  the  stores  held  by  the 
Government  could,  it  was  felt,  be  at  any  time  released  to 
steady  prices.  This  feeling  that  such  release  might  take 
place  had  not  a  little  to  do  with  the  easier  quotations  of 
the  early  summer  of  19 15. 

What  actually  did  most  to  relieve  the  situation  at  that 
time,  however,  was  the  arrival  of  part  of  the  abundant 
Indian  wheat  crop.  The  price  of  this  had  been  regulated 
by  the  Government  of  India,  which  in  March,  19 15,  co- 
operated with  the  home  Government  to  have  the  export- 
able surplus  shipped  to  England.     In  England,  the  Gov- 

7*  Cd.  8483 ;  P.  D.  C,  1916,  LXXXVI,  501. 


v. 


emment  turned  all  the  firms  engaged  in  importing  Indian 
wheat  —  some  half-dozen  there  were  —  into  Govern- 
ment agents,  paying  them  a  commission  but  allowing 
them  no  other  profit.  In  this  way  2,500,000  quarters 
of  wheat  were  acquired  and  distributed.*^^ 

By  the  time  that  the  cargoes  reached  England,  the  out- 
look had  improved  in  still  other  directions.  The  grow- 
ing American  crop  promised  well  and  eventually  proved 
to  be  an  enormous  one;  there  was  high  hope  that  the 
Dardanelles  expedition  might  be  successful  in  opening 
the  Black  Sea  and  liberating  its  stores.  Prices  reflected 
the  optimism.  From  June  until  November  wheat  fell 
back  to  a  range  of  from  56  s.  to  60  s.  the  quarter ."^^ 
Complaints  about  the  high  cost  of  living  were  quieted, 
and  the  Government  seized  the  opportunity  to  provide 
storage  facilities  in  case  another  emergency  should  arise. 
Since  England  and  Wales  had  small  storage  capacity, 
Lord  Selborne  devised  a  scheme  and  made  arrangements 
with  a  British  trade  buyer  w- hereby  large  quantities  of 
wheat  might  be  piled  up.  So  excellent  was  the  organi- 
zation that  henceforth  the  Government  could  hold  on  its 
own  account  extensive  supplies  without  inconveniencing  a 
single  port  or  warehouse."^^ 

Not  until  the  early  winter  of  191 5-16  did  the  situation 
again  become  ominous.  Then  from  December  to  Feb- 
ruary the  price  of  wheat  once  more  rose  from  58  s.  6  d. 

75  p.  D.  C,  loc.  cit. 

76  Cd.  8483. 

77  P.  D.  C.„  loc.  cit.,  p.  502. 


204 


WAR    TIME    CONTROL   OF    INDUSTRY 


to  j}^  s.  The  Government  perhaps  to  a  sHght  degree 
contributed  to  this  advance  by  again  entering  the  market 
as  a  purchaser.  Most  of  its  buying,  however,  was  done 
after  the  rise  had  taken  place,  and  this  time  at  least  it 
did  not  compete  in  its  purchases  with  the  Allies.  At  the 
end  of  the  year  it  had  suggested  to  the  French  and  Italian 
Governments  that  co-operative  buying  was  preferable  to 
competition,  and  a  joint  committee  had  been  appointed 
to  sit  in  London  and  make  the  requisite  purchases. 
Henceforth  this  Committee  met  daily  and  its  agent  acted 
for  the  Allied  Governments."^^ 

What  pretty  clearly  lay  behind  the  rising  prices  of 
wheat  and  flour  at  this  time  was  not  so  much  Govern- 
ment buying  as  the  advance  in  freight  charges.  From 
August,  19 1 5,  such  charges  rose  rapidly  until  the  New 
Year."^^  At  once  the  price  of  wheat  responded  and  after 
August  was  higher  in  London  than  it  was  in  New  York. 
In  November,  19 15,  the  Government  formed  its  resolve 
to  requisition  shipping  space.  In  due  course  the  Requi- 
sitioning (Carriage  of  Foodstuffs)  Committee  made  ar- 
rangements whereby  liners  and  a  considerable  number  of 
cargo  steamers  plying  to  North  America  were  to  offer 
from  50  per  cent,  to  75  per  cent,  of  their  cargo  space  for 
the  carriage  of  wheat  and  flour.  The  new  freight  rates 
were  greatly  below  the  old  ones  and  the  price  of  wheat 
declined  some  35  per  cent,  until  in  June,  1916,  it  stood 
at  48  s.  6  d.     Government  requisitioning  of  shipping  had 

78  p.  D.  C,  1916,  LXXXVI,  19. 
■^s  Cf .  above  p.  145. 


FOOD 


205 


been  as  effective  in  preventing  a  crisis  as  had  Government 
purchasing  of  wheat. 

Unfortunately  after  July,  1916,  a  new  set  of  circum- 
stances became  operative.  The  year's  wheat  crop  in  the 
United  States  had  been  overtaken  by  disease,  that  of  the 
Argentine  was  suffering  from  drought,  and  the  harvests 
of  Canada,  India,  and  the  United  Kingdom  were  rela- 
tively poor,  the  last  having  fallen  off  by  more  than  one 
and  one-half  million  quarters.  Only  in  Australia  was 
the  promise  good  and  Australia  was  very  far  away. 
Again  the  price  of  wheat  rose  until  in  October  it  stood 
at  86  s.  per  quarter.  The  four-pound  loaf  of  bread, 
which  before  the  war  sold  for  about  5%  d.,  by  November 
sold  at  between  9  d.  and  10  d.^^  At  the  Trade  Union 
Congress  of  September  high  prices  were  regarded  as  the 
most  pressing  of  grievances,  and  a  resolution  was  adopted 
urging  the  Government  either  to  fix  maximum  prices  or 
to  assume  full  control  over  supplies.^^ 

So  serious  had  the  situation  become  that  in  October 
another  decisive  step  in  state  control  was  taken.  A 
Royal  Commission  was  appointed  *'  to  inquire  into  the 
supply  of  wheat  and  flour  in  the  United  Kingdom,  to 
purchase,  sell,  and  control  the  delivery  of  wheat  and 
flour  on  behalf  of  His  Majesty's  Government,  and  gen- 
erally to  take  such  steps  as  may  seem  desirable  for  main- 
taining the  supply."  ^^    The  intermittent  action  of  a  Grain 

80  Cd.  8483. 

81  M.  G.,  Sept.  9,  1916,  p.  8. 

82  B.  T.  J.,  Oct.  12,  1916,  p.  91. 


2o6 


WAR    TIME    CONTROL   OF    INDUSTRY 


Supplies  Committee,  which  bought  reserves  in  emergen- 
cies but  left  the  regular  trade  in  private  hands,  was  to  be 
superseded  by  the  continuous  control  of  a  body  which 
would  largely  if  not  altogether  take  charge  of  the  im- 
portation of  wheat.  The  Royal  Sugar  Commission  was 
to  have  its  counterpart. 

Anticipating  the  creation  of  the  Commission,  the  Gov- 
ernment made  a  large  purchase.  It  bought  550,000  tons 
of  Australian  wheat,  paying  therefor  £4,000,000.  Dur- 
ing the  preceding  season  the  world's  competition  for 
tonnage  had  been  greater  than  its  eagerness  to  buy  wheat, 
and  the  Commonwealth  Government  had  purchased  the 
whole  of  the  native  crop.  From  such  full  granaries  the 
home  Government  might  draw,  if  only  it  could  provide 
shipping  facilities.  It  was  not,  to  be  sure,  economical  to 
import  grain  from  Australia,  since  the  ratio  of  freight 
charges  to  the  price  of  wheat  was  one-third,  whereas  in 
the  case  of  North  American  wheat  the  ratio  was  one- 
fifth.  Uneconomical,  however,  the  Government  was 
forced  to  be,  and  shipping  facilities  had  to  be  found. 

For  nearly  a  year  the  Requisitioning  (Carriage  of 
Foodstuffs)  Committee  had  been  providing  trans-Atlantic 
tonnage  with  excellent  results.  The  new  Royal  Com- 
mission, accordingly,  continued  its  policy,  appropriating 
for  the  state  much  of  what  had  once  gone  as  profits  to 
individual  importers.  One  change  it  made:  variable 
rates  of  freight  gave  way  to  fixed  ones.  Thereby  state 
requisitioning  of  shipping  at  blue-book  rates  became  a 
completely  accepted  policy  and  the  consumer  could  be  as- 


FOOD 


207 


sured  that  so  far  as  British  shippers  were  concerned,  no 
undue  profits  in  grain  intervened  between  the  producer 
and  himself.  How  much  was  saved  on  transportation 
became  apparent  from  payments  made  to  certain  neutral 
vessels,  which  to  increase  the  tonnage  were  also  chartered. 
Mr.  Runciman  designated  these  freights  as  "  gigantic," 
and  remarked  that,  if  the  Government  had  had  to  pay 
open  market  rates,  the  charge  would  have  been  50  per 
cent,  higher  than  what  it  was  paying.^^ 

To  avoid  the  risk  that  the  Government  might  not  buy 
wheat  as  advantageously  as  private  merchants,  particular 
attention  was  given  to  the  personnel  of  the  Commission. 
It  was  not  drawn  haphazard  from  the  House,  but  was 
appointed,  as  the  staff  of  a  great  firm  is  selected,  with  an 
eye  solely  to  business  efficiency.     To  it  were  called  not 
only  men  familiar  with  the  Argentine  and  America,  but 
others  who  deal  with  more  distant  regions  and  still  others 
who  know  about  the  distribution  of  grain  at  home.     In 
the  early  days  of  its  existence  when  its  tasks  were  urgent 
and    burdensome,    it    sat    daily  —  morning,    noon,    and 
night.®*     In  November  the  Canadian  Bankers'  Associa- 
tion offered  to  extend  to  it  a  six-month's  credit  of  $20,- 
000,000  for  the  purchase  of  Canadian  grain.®^     In  De- 
cember it  signed  on  behalf  of  the  Allies  a  contract  for 
3,000,000  additional  tons  of  Australian  wheat.     If  the 

88  p.  D.  C,  1916,  LXXXVI,  19;  LXXXVII,  843;  M.  G.,  Oct.  n, 
1916,  p.  5. 
84  Ibid.,  LXXXVI,  501. 
«5  M.  G.,  Nov.  28,  1916,  p.  4- 


208 


WAR   TIME   CONTROL  OF   INDUSTRY 


FOOD 


209 


prices  paid  in  the  two  Australian  transactions,  32  s.  and 
38  s.  per  quarter  free  on  board,  are  compared  with  the 
market  price  of  wheat  in  London,  86  s.  in  October,  it 
will  be  seen  how  advantageously  the  Commission  was 
able  to  buy.^^  To  its  low  contract  prices  there  had  to  be 
added  only  the  blue-book  freight  rates  of  requisitioned 
vessels.  The  chairman  of  the  large  milling  firm  of 
Spillers  and  Bakers  in  July,  191 7,  complimented  the  Com- 
mission. It  had,  he  said,  "dealt  with  a  very  difficult 
task  in  a  manner  which  could  only  be  impugned  by  the 
most  carping  critic."  ^^ 

Certain  criticisms  relative  to  the  Commission  were  of- 
fered in  Parliament  by  Mr.  Barnes  at  the  time  of  its 
creation.     Besides  experts,  representatives  of  bakers  and 
of  consumers  might  well  have  been  appointed  to  it;  there 
should  be  no  doubt  about  its  right  to  purchase  the  entire 
imported  wheat  supply;  particularly  it  ought  to  be  able 
to  buy  home  wheat  at  a  fixed  price.     More  than  two 
years  before,  Mr.  Barnes  continued,  a  deputation  of  trade 
unionists,  co-operators,  and  others   representing  labour 
interests  had  waited  upon  the  Government  and  had  urged 
not  only  the  step  just  taken  relative  to  foreign  wheat  but 
the  further  purchase  of  the  home  crop.     Even  since  then 
food  speculators,  including  the  British  farmer,  had  been 
lining  their  pockets  with  the  pickings  of  the  poor  man's 
loaf.     Inasmuch  as  labour  was  now  tied  up  in  particular 
workshops  under  the  Munitions  of  War  Act,  why  should 

86  L.  T.,  Jy.  17,  191 7,  p.  10. 

87  Ibid.,   Jy.    30,   p.    12. 


1 


not  the  economic  principle  be  extended  and  the  farmer 
dealt  with  on  similar  lines  ?  ^^ 

The  question  of  the  wheat  grown  by  the  British  farmer 
was,  however,  hedged  about  with  difficulties.  To  restrict 
the  price  of  it  might  lead  to  a  decline  in  the  output,  and  a 
very  serious  decline  of  this  sort  had  already  taken  place. 
In  19 1 6  the  area  under  wheat  in  the  United  Kingdom  had 
fallen  off  by  250,000  acres  and  a  further  falling  off  of 
500,000  acres  in  191 7  was  predicted.  Should  this  take 
place,  the  total  decrease  in  output  would  be  some  2,600,- 
000  quarters.  To  import  an  equivalent  amount  from 
Australia  would  require  100  ships  of  5000  tons  for  four 
and  one-half  months.^^  In  view  of  the  scarcity  of  mer- 
chants ships  at  the  end  of  19 16,  it  is  comprehensible  that 
the  Government  was  not  then  inclined  to  discourage  the 
British  farmer  by  a  limitation  of  his  profits.  Before  a 
year  had  passed,  it  took  measures,  as  will  appear,  to  stim- 
ulate him  to  increased  production. 

If  the  Government  was  unable  at  the  moment  to  ac- 
cede to  the  labour  demand  that  the  price  of  British  wheat 
be  fixed,  it  did  within  a  month  adopt  another  policy  which 
had  found  favour  in  the  same  quarter.  On  November 
15,  1916,  Mr.  Runciman  announced  in  the  Commons  that 
there  would  be  created  a  Ministry  of  Food  with  a  Food 
Controller  at  its  head.  Commissions  had  come  into  be- 
ing, he  explained,  to  deal  with  the  sugar  supply,  the  im- 
ported meat  supply,  the  imported  wheat  supply,  while 

88  P.  D.  C,  1916,  LXXXVI,  436,  437. 

89  Ibid,,  458. 


2IO 


WAR    TIME    CONTROL   OF    INDUSTRY 


branches  of  various  departments  dealt  with  mercantile 
transactions.     But  there  was  no  co-ordinating  hand.     As 
the  problem  expanded,  the  Government   felt  more  and 
more  that  some  minister  must  be  free  to  deal  with  noth- 
ing but  food  problems  and  to  co-ordinate  all  related  ac- 
tivities of  this  kind.     Drastic  powers,  too,  looking  in  new 
directions   would  be  conferred  upon  the  new  minister. 
Bit  by  bit,  added  Mr.  Runciman,  the  Government  had 
been  driven  to  such  a  policy  against  the  will  of  many  of 
its  members,   himself  included.     But  the  easy  flow  of 
voluntary  operations  could  no  longer  be  depended  upon.®^ 
Next  day,  November  i6,  the  new  powers  referred  to 
were  announced  by  an  Order  in  Council,  and  were  em- 
bodied in  regulations  2F  and  2G  under  the  Defence  of 
the  Realm  Act.     These  provide  that  whenever  the  Board 
of  Trade  are  of  the  opinion  that  special  measures  should 
be  taken  to  maintain  the  supply  of  any  article  important 
for  the  food  or  for  the  wants  of  the  nation,  it  may  apply 
any  one  of  the  following  provisions,  generally  or  locally. 
Foods  of  national   importance  may  not  be  wasted  or 
unnecessarily  destroyed ;  the  uses  to  which  they  shall  or 
shall  not  be  put  may  be  defined;  the  manner  of  their 
manufacture  may  be  prescribed;  the  mode  of  their  sale 
and  distribution  throughout  the  country  may  be  deter- 
mined; to  prevent  unreasonable  inflation  of  prices,  market 
operations  in  them  may  be  regulated;  their  prices  may 
be  fixed,  i.  e.,  the  amount  by  which  the  price  of  any  of 
them  may  exceed  its  corresponding  price  at  a  specified 

90  Ibid,  LXXXVir,  856,  858,  862. 


FOOD 


2X1 


I 


date;  supplies  of  them  may  be  requisitioned  by  the  Board 
of  Trade;  and  full  information  as  to  existent  stocks  of 
them  may  be  required.^^  The  bill  creating  the  new  min- 
istry was  not  introduced  and  passed  until  a  month  later, 
when  Lord  Devonport  became  Food  Controller;  but  in 
the  interim  several  orders  carrying  out  the  new  regula- 
tions were  issued  by  the  Board  of  Trade.  Hitherto  gov- 
ernmental interference  in  the  food  supply  had  been  lim- 
ited to  the  control  over  sugar  and  to  the  purchase  of  im- 
ported meat  and  imported  wheat.  Now,  however,  a  new 
period  opens  and  governmental  restrictions  of  a  varied 
kind  begin  to  be  imposed. 

Under  the  new  regulations,  orders  of  three  general 
sorts  were  issued.  The  first  series  looks  toward  economy 
through  the  introduction  of  cheaper  constitutents  into 
food,  various  sorts  of  war  bread  being  prescribed  for  all 
consumers.  Orders  of  another  sort  urge  economy  in 
consumption  and  the  avoidance  of  waste,  being  always 
likely,  if  poorly  observed,  to  culminate  in  rationing 
schemes.  Orders  of  the  third  sort  endeavour  to  protect 
the  consumer  by  the  fixing  of  prices  and  by  the  preven- 
tion of  speculative  operations  on  the  market.  For  con- 
venience in  following  the  intricate  history  of  a  year  of 
food  regulation,  each  group  will  be  considered  separately. 

On  November  20,  19 16,  the  first  order  under  the  new 
regulations  was  issued,  and  became  operative  a  week 
later.     It  provided  that  henceforth  certain  percentages 

91  D.  F.  M.,  Regulations  2F  and  2G;  B.  T.  J.,  Nov.  23,  1916,  pp. 
566-568. 


212 


WAR    TIME    CONTROL   OF   INDUSTRY 


of  flour,  higher  than  the  customary  ones,  must  be  ex- 
tracted from  the  various  grades  of  wheat.     At  the  be- 
ginning of  the  war  Sir  Francis  Fox  had  urged  that  from 
100  tons  of  wheat  not  merely  70  tons  of  white  flour 
should  be  milled,  but  8>8  tons.     The  product,  too,  would, 
he  declared,  be  more  nutritious.^2     According  to  the  new 
order,  English  wheat  must  thenceforth  yield  a  "  straight- 
run,"  i.  e.,  76  per  cent,  instead  of  70  per  cent,  of  flour,  for 
which  reason  this  first  milling  order  came  to  be  known  to 
the  trade  as  the  "  76  per  cent,  order."     On  and  after 
January  i,  1917,  only  flour  so  milled  might  be  used  for 
making  bread  or  any  other  article  of  food,  and  the  Board 
of  Trade   warned  to  this  effect  those  who  were  said 
to  be  accumulating  stores  of  the  whiter  flour  for  private 
consumption.^3     j^-^    ^^^^^    ^^^^    .^^    accord    with    the 

recommendation  of  certain  members  of  the  committee 
which  was  investigating  the  increased  prices  of  commodi- 
ties, and  which  made  its  report  relative  to  bread,  flour, 
and  wheat  on  November  15.^4  The  measure  was  the 
first  step  taken  toward  the  creation  of  a  war  bread. 

On  January  29,  19 17,  a  new  order  made  compulsory 
the  extraction  of  81  per  cent,  instead  of  y6  per  cent,  from 
English  wheat,  or,  barring  this,  the  addition  to  the  76  per 
cent,  of  a  further  5  per  cent,  of  flour  made  from  barley, 
rice,  maize,  semolina,  oats,  rye,  or  beans.  By  an  order 
of  February  24,  the  alternative  was  withdrawn.     From 

»2L.  T.,  Aug.  17,  1914,  p.  ir. 

»3  B.  T.  J.,  Nov.  23,  1916,  pp.  570-571. 

»*  Cd.  8483. 


' 


FOOD  213 

the  wheat  milled,  81  per  cent,  of  flour  must  be  extracted 
and  5  per  cent,  of  the  inferior  grain  must  also  be  added. 
A  further  admixture  of  10  per  cent,  was  permitted.^^ 
Again  on  April  10  the  percentages  were  raised.  To  the 
81  per  cent,  wheaten  flour,  10  per  cent,  from  an  inferior 
grain  must  be  added  and  25  per  cent,  might  be.^^  Finally, 
on  May  10  the  constituents  of  war  bread  were  definitely 
regulated.  With  the  81  per  cent,  wheaten  extraction,  20 
per  cent,  of  inferior  flour  must  be  mixed  and  50  per  cent, 
might  be.^^  In  the  same  month  a  Scotchman  outdid  the 
Government.  In  London  he  produced  a  bread  which 
contained  only  20  per  cent,  of  wheaten  flour,  the  re- 
mainder being  a  mixture  of  oaten  flour  and  rolled  oats. 
It  was  said  to  keep  well  and  to  improve  with  keep- 
ing.^^ 

To  supervise  the  carrying  out  of  the  new  regulations 
the  Government  at  the  end  of  April  took  over  all  the  flour 
mills  in  the  United  Kingdom  and  appointed  a  Mills  Con- 
trol Committee.  Particularly  was  the  new  Committee  to 
see  that  millers  used  whatever  inferior  grain  was  most 
readily  procurable  in  any  district.  Chinese  horse-beans, 
for  example,  were  at  the  moment  abundant  in  London, 
maize  more  available  in  the  North  and  West.  The 
millers  had  been  inclined  to  secure  whatever  grain  was 
cheapest,  regardless  of  how  far  they  might  have  to  trans- 
port it.     If  the  Committee  should  be  successful  in  stop- 

»5  B.  T.  J.,  Mar.  i,  1917,  p.  612. 
86  Ibid.,  Apr.  12. 
»7  L.  T.,  Jy.  30,  1917,  p.  13. 
«8  M.  G.,  May  21,  1917,  p.  4. 


214 


WAR   TIME    CONTROL    OF    INDUSTRY 


FOOD 


ping  this  practice,  it  was  clear  that  a  part  of  the  burden 
of  the  railways  would  be  lifted.®^ 

The  new  bread  was  far  from  being  an  immediate  suc- 
cess.    Although  the  millers  in  general  observed  the  order 
for  an  8 1  per  cent,  extraction  and  a  20  per  cent  admix- 
ture, their  mills  were  unaccustomed  to  the  inferior  grains 
and  they  found  it  hard  to  reduce  them  to  the  requisite 
fineness.     They  were  further  not  required  to  label  their 
product   so   as   to   show   the  percentage  of  admixture. 
The   bakers,   in   consequence,   saw   a   flour   of   unknown 
quality  coming  into  their  hands  and  they  quickly  pro- 
nounced this  quality  most  unsatisfactory.     Owing  to  the 
presence  of  more  coarsely-ground  grains,  the  texture  of 
the  bread  was  close  and  moisture  was  unduly  retained. 
In  warm  weather  the  loaf  consequently  became  *'  ropey  " 
and  inedible.     At  the  end  of  June,  the  London  Master 
Bakers'   Protection  Society  by  resolution  requested  the 
Prime  Minister  to  prevent  the  great  waste  which  was 
being    occasioned    through    the    use    of    inferior    flour. 
Thirty-three  of  their  number  complained  of  waste  during 
the  last  fortnight,  while  two  bakers  had  been  compelled  to 
destroy  1500  loaves,  not  being  allowed  to  feed  them  to  the 
pigs.     The  bread  at  best  was  too  harsh  for  children  and 
elderly  people.     To  a   straight  run  or  to  the  separate 
milling  of  the  other  cereals  there  would  be  no  objection. 
Inasmuch  as  dilution  had  varied  greatly  in  different  re- 
gions (from  20  per  cent,  to  50  per  cent.),  some  standard- 
izing was  most  desirable.^ 

»9  B.  T.  J.,  Je.  29,  1917,  p.  204;  L.  T.,  May  5,  1917. 
1  L.  T.,  Je.  29,  1917,  p.  3. 


215 


On  July  10,  Mr.  Anderson  speaking  for  the  Ministry 
of    Food    defended    the    w^ar    bread.     Although    many 
millers  had  not  yet  well  adapted  themselves  to  making 
the  mixed  flour,  most  of  them  had.     The  digestibility  of 
bread  in  which  considerable  maize  is  used  had  been  in- 
vestigated before  the  order  was  issued,  and  the  tendency 
of  bread  to  become  ropey  is  not  directly  due  to  the  ad- 
mixture of  inferior  flours.     "  Rope  "  is  caused  by  germs 
(bacilli  maesenterici)   generally  present  in  dirt  or  dust 
and  usually  on  the  outer  husk  of  wheat.     Though  almost 
always  found  in  flour,  these  germs  increase  in  number 
through  closer  milling  and  by  the  use  of  inferior  grains. 
Normally  harmless,  they  may  under  certain  circumstances 
cause  fermentation  and  make  the  bread  ropey  and  un- 
wholesome.    The  recent  prevalence  of  rope  was  probably 
due  to  the  warmth  and  moisture  of  exceptional  weather. 
Admixture  of  inferior  grains  could  not  be  dispensed 
with,  since  only  by  their  use  could  the  supply  of  flour  be 
maintained    while    shipping    facilities    were    restricted. 
Nor  was  standardization  feasible.     Different  grains  are 
more  easily  got  at  different  places  and  should  be  utilized. 
During  the  next  few  months  there  would  not  be  much 
maize,  but  when  the  pinch  came  later  it  was  hoped  that 
there  would  be  an  abundant  supply  from  America.^ 

A  similar  answer  was  returned  to  the  National  Associa- 
tion of  British  and  Irish  millers,  who  on  July  4  petitioned 
that  the  flour  extracted  from  wheat  be  reduced  from  81 
per  cent,  to  76  per  cent.     The  Association  was  assured 

2  Ibid.,  Jy.  10,  p.  3. 


I 


2l6 


WAR    TIME    CONTROL   OF    INDUSTRY 


that  careful  investigations  were  still  in  progress  as  to  food 
values  and  that  relatively  small  adjustments  in  milling 
would  obviate  many  difficulties.     The  Allies  would  have 
ground  for  complaint  if  the  British  Government  made 
concessions  which  they  themselves  could  not  afford      It 
would,  nevertheless,  happen  for  a  time  that  wheat  would 
be  more  extensively  used.     While  the  supply  of  maize 
was  running  low,  stocks  of  wheat  in  the  country  had  been 
increased,  owing  to  the  activity  of  the  Royal  Commission, 
and  might  safely  be  drawn  upon.^ 

The  milling  of  white  flour  or  even  "  straight-run  " 
flour   was   thus   definitely    forbidden    in    Great    Britain. 
White  flour  was  no  longer  to  be  had,  and  for  those  who 
wished  wheaten  flour  only  the  imported  product  remained 
Complaint  arose  that  the  supply  of  this  was  passing 
largely  into  the  hands  of  the  wealthier  classes.     But  Mr. 
Clynes  stated  in  the  Commons  that  the  Food  Ministry 
had  not  found  it  so,  but  that  the  demand  came  as  well 
from  the  mining  and  industrial  districts.     What  imported 
flour  there  was,  the  Ministry  was  distributing  impartially. 
The  new  9  d.  loaf  would  make  it  impossible  for  private 
holders  of  such  flour  to  sell  at  a  profit,  and,  as  a  matter  of 
fact,  stocks  of  it  in  private  hands  were  very  small.-*     By 
August  I  the  Food  Controller  announced  that  precautions 
had  been  taken  to  deal  with  the  improper  use  of  im- 
ported flour  and  that  the  Royal  Commission  had  recently 
assumed  control  of  all  supplies  arriving  in  the  country.^ 

8  Ibid,  Jy.    19,  p.   3. 

*  Ibid,  Jy.  25. 

«  Ibid,  Jy.  30,  p.   13. 


FOOD  217 

Two  weeks  later  the  Premier  congratulated  the  Com- 
mons on  the  success  of  the  war-bread  measures.  Closer 
milling,  he  said,  had  saved  70,000  quarters  of  wheat 
weekly,  or  one-seventh  of  the  total  consumption.^  From 
this  time,  too,  little  complaint  is  heard  of  the  quality  of 
the  bread.  Either  the  nation  had  become  accustomed  to 
it  or  millers  and  bakers  had  learned  to  make  it  more  sat- 
isfactorily. The  Government's  action  had  been  vindi- 
cated. 

Along  with  governmental  orders  prescribing  the 
quality  of  bread  which  might  be  eaten,  there  appeared 
another  series  looking  toward  economies  in  consumption 
and  toward  the  elimination  of  waste.  Not  only  were 
official  orders  issued  to  this  end  from  the  close  of  1916, 
but  appeals  for  voluntary  action  became  urgent.  The 
orders  were  directed  toward  brewers  and  proprietors  of 
public  eating-places ;  the  appeals  were  made  to  all  house- 
holds in  the  land. 

Most  obvious  of  all  economies  was  a  reduction  in  the 
brewing  of  beer.  In  1914,  36,000,000  barrels  of  this 
beverage  were  brewed  in  the  United  Kingdom.  Since 
after  that  time  men  were  continually  departing  for  the 
front  and  since  little  beer  was  exported  to  France,  the 
Government  early  in  1916  restricted  the  brew  for  the 
year  to  26,000,000  barrels.^  Again,  in  January,  1917, 
when  shortage  of  shipping  and  of  food  was  imminent, 
further  restriction  seemed  desirable.     It  was  pointed  out 

« Ibid,  Aug.  17,  p.  8. 

^  L.  E.,  Feb.  17,  1917,  p.  309. 


2l8 


WAR   TIME    CONTROL   OF   INDUSTRY 


FOOD 


in  the  Commons  that  during  the  first  twenty  months  of 
the  war  1,400,000  tons  of  shipping  had  been  required  to 
convey  materials  for  brewing  and  distiUing  and  that 
300,000  tons  of  sugar  had  been  used  in  brewing.^  Lord 
Devonport  explained  that  the  proposed  measure  was 
not  one  of  temperance  or  social  reform  but  that  the  issue 
was  "  bread  "  vs.  "  beer."  The  amount  of  beer  which 
might  be  brewed  was,  accordingly,  reduced  by  30  per 
cent.,  and  for  the  36,000,000  barrels  of  19 14  were  sub- 
stituted 18,200,000  barrels.  The  saving  from  this  30  per 
cent,  reduction,  Lord  Devonport  explained,  would  be 
286,000  tons  of  barley,  36,000  tons  of  sugar,  16,500  tons 
of  grits,  to  say  nothing  of  the  cost  of  transport,  labour, 
and  fuel.  The  barley  saved  would  yield  50  per  cent, 
flour,  while  the  farmer  would  get  40  per  cent,  instead  of 
25  per  cent,  of  the  barley  offals.^  By  an  order  of  March 
29  a  final  reduction  to  10,000,000  barrels  for  the  year 
was  enjoined,  an  amount  which  was  less  than  30  per  cent, 
of  that  brewed  annually  before  the  war.^^ 

This  last  measure  sent  up  the  retail  price  of  beer  so 
violently  that  it  now  exceeded  the  pre-war  price  by  100 
per  cent,  or  150  per  cent.  At  a  public  house  in  Clapham 
customers,  being  asked  nearly  double  the  price  of  the  pre- 
ceding week,  refused  to  pay  and  walked  out  without 
touching  the  liquor  served.  ^^  During  the  summer  the 
consumer's  discontent  grew  and  was  reported  by  the  Com- 

8  P.  D.  C,  1916.  LXXXVII,  911. 
»L.  T.,  Jan.  25,  iQi?- 
iP  B.  T.  J..  Apr.  5.  1917,  p.  18, 
11  L.  T.,  Apr.  4,  1917,  p.  3- 


219 


mittee  on  Industrial  Unrest.     Mr.  Ben  Tillett,  secretary 
of  the  Dockers'  union,  wrote  to  the  Premier  pointing  out 
the  danger  of  curtailing  the  workingman's  supply  of 
beer  and  stating  that  already  many  men  in  the  union  had 
refused  on  this  account  to  work  overtime  or  on  other  than 
certain  days  in  the  week.     He  advocated  the  brewing  of 
26,000,000  barrels  of  beer  at  a  specific  gravity  lower  than 
the  one  prevailing.     There  was  plenty  of  foreign  malt 
and  barley  in  the  country,  he  asserted,  that  could  be 
utilized  for  brewing  light  beers.^^     Thus  warned,  the 
Government  gave  the  subject  attention  and  soon  took 
measures  to  provide  more  beer  of  light  specific  gravity  for 
munitions  workers  and  others  engaged  in  heavy  work. 
Already  it  had  granted  an  increased  allowance  of  beer  for 
the  hot  months  and  now  considered  the  extension  of  the 
privilege  for  three  months  longer.i^     The  two  restrictive 
measures  of  the  spring  were  thus  modified  and  the  con- 
sumers of  beer  conciliated. 

A  second  method  of  economizing  foodstuffs,  enforced 
by  the  Government,  had  reference  to  public  meals.  Al- 
though at  the  beginning  of  the  war  the  big  hotels  had 
cut  down  their  menus,i*  it  was  not  until  December  5, 
19 1 6,  that  uniform  and  more  stringent  economies  were 
enjoined.  By  the  Public  Meals  Orders  of  that  date  the 
Board  of  Trade  prohibited  the  serving  in  public  eating- 
places  of  meals  which,  between  6  :oo  p.  m.  and  9 130  p.  m., 

12  Ibid.,  Aug.  3,  p.  3. 

"  Ibid.,  Aug.  13,  p.  3. 

"  Ibid.,  Aug.  19,  1914,  p.  9. 


220 


WAR    TIME   CONTROL   OF   INDUSTRY 


consisted  of  more  than  three  courses  or  which  at  any 
other  hour  consisted  of  more  than  two  courses.  Plain 
cheese  was  not  to  count  as  a  course  and  hors  d'oeuvres, 
dessert,  and  soup  were  to  count  as  half  courses. ^^  The 
order  was  promptly  enforced.  In  the  Exeter  police- 
court,  for  example,  the  landlord  of  the  New  London 
Hotel  soon  answered  two  summonses  for  having  served 
meals  of  more  than  three  courses  at  the  dinner  hour. 
The  Bench  dismissed  the  first  charge  on  the  payment  of 
costs,  but  for  the  second  imposed  a'  fine  of  lo  s.  and 
costs.  ^^ 

After  three  or  four  months'  trial  the  order  was  found 
to  produce  unsatisfactory  results.  All  lighter  and 
"  made  "  dishes  tended  to  vanish,  the  "  art  of  the  cook 
disappeared."  People  ordered  solid  courses  and  the 
consumption  of  meat  increased.  In  April,  accordingly, 
Lord  Devonport  issued  a  new  Public  Meals  Order,  based 
on  the  principle  of  rationing  hotels  by  bulk  and  restrict- 
ing them  to  a  weekly  allowance.  Houses  frequented  by 
the  working  classes,  where  the  cost  of  a  meal  does  not 
exceed  is.  3d.,  were  exempt.  Other  hotels  and  restau- 
rants were  required  to  observe  one  meatless  day  each 
week,  Tuesday  in  London,  Wednesday  elsewhere;  they 
might  serve  no  potatoes  except  on  the  meatless  day  and  on 
Friday;  to  each  customer  they  might  allow  daily  only  12 
ounces  of  meat,  8  ounces  of  bread,  2  ounces  of  flour,  and 
1/4  ounces  of  sugar.     By  this  rationing  it  was  hoped 

"  B.  T.  J.,  Dec.  7,  1916. 
"L.  T.,  Jan.  13,  1917,  p.  6. 


FOOD 


221 


that  the  saving  in  meat,  as  compared  with  the  consump- 
tion of  November,  would  be  56  per  cent.  If  comparison 
were  made  with  the  period  since  November  the  saving 
ought  to  be  65  per  cent,  in  meat,  53  per  cent,  in  bread,  63 
per  cent,  in  sugar.  ^^ 

Apart    from  the  restriction  placed   upon  the  use  of 
potatoes,  a  restriction  due  to  a  seasonal  shortage  of  that 
vegetable,  the  new  features  in  this  scheme  were  the  meat- 
less day  and  the  food  ration.     The  meatless  day  had 
already  been  adopted  on  February  27  by  several  Lon- 
don clubs.     Rationing  had  been  introduced  more  than 
two  months  before,  but  thus  far  had  been  of  a  purely 
voluntary  character.     On   February  2  the   Food   Con- 
troller had  issued  his  appeal.     If  every  consumer  would 
reduce  his  consumption  of  bread  by  one  pound  a  week  and 
of  meat  by  one-half  of  a  pound,  over  one  million  tons  of 
these    foods   would   be  saved   annually.     All  heads  of 
households  were  therefore  strongly  urged  to  limit  per 
capita  consumption  weekly  to  4  pounds  of  bread  (equiv- 
alent to  3  pounds  of  flour),  2j^  pounds  of  meat,  and  ^ 
pound  of  sugar.  18     i£  g^^  j^^^,j^  ^^^^  ^^^j^  ^^^  ^^  ^^_ 

forded,  more  bread  might  be  used.  By  a  further  appeal 
of  March  7  the  allowance  of  bread  was  cut  to  3>^  pounds, 
and  in  April  that  of  sugar  to  J^  pound.  Since  on  such 
a  basis  the  United  Kingdom  would  annually  consume 
some  23  million  sacks  of  flour  (of  280  pounds  each), 
whereas  its  normal  consumption  was  more  than  40  mil- 

17  Ibid.,  Apr.  5. 
"  Ibid.,  Feb.  3. 


222 


WAR    TIME    CONTROL   OF    INDUSTRY 


lion  sacks,  the  saving  would  be  above  40  per  cent.  If 
allowance  were  made  for  the  20  per  cent,  compulsory 
admixture,  the  consumption  of  wheat  would  be  reduced 
by  more  than  50  per  cent.^^ 

After  three  months,  however,  it  became  apparent  that 
the  Food  Controller's  rations  were  not  being  generally 
observed.  Some  industrial  centres  like  Keighley  set  an 
excellent  example  of  organized  economy,  reducing  the 
average  weekly  consumption  per  head  to  3.07  pounds  of 
flour,  2  pounds  of  meat,  and  .71  pound  of  sugar.  North 
Wales  did  better  than  any  other  region  of  the  United 
Kingdom.  But  South  Wales  stood  in  contrast  and  col- 
liery districts  in  general  proved  indifferent.  Bread  was 
wasted  in  school-children's  dinner  pails,  which  mothers 
filled  too  full,  in  army  canteens,  where  the  soldiers  bought 
bread  in  addition  to  their  rations,  and  at  the  Zoo,  where 
people  still  fed  their  favourite  animals.  Round  Chelms- 
ford agricultural  labourers  consumed  on  the  average  14 
pounds  a  head  per  week.^^  The  National  War  Savings 
Committee  estimated  that  in  the  United  Kingdom  at  large 
the  consumption  of  bread  fell  off  only  2  per  cent,  in 
March  and  4  per  cent,  in  April. ^^ 

In  view  of  the  comparatively  slight  initial  success  of 
the  scheme,  new  measures  were  taken  to  enlist  wider  co- 
operation. The  King  made  a  personal  appeal.  By 
Royal   Proclamation  of   May  2,    19 17,  he  exhorted  all 

19  Ibid.,  Jy.  30,  p.  13. 

20  Ibid.,  May  i,  p.  8. 

21  Ibid.,  Je.  2T. 


FOOD 


223 


men  and  women  to  practise  the  greatest  frugality  in  the 
use  of  every  species  of  grain,  and  he  charged  all  heads  of 
households  to  reduce  the  consumption  of  bread  in  their 
respective  families  by  at  least  one-fourth  of  the  quantity 
consumed  in  ordinary  times,  to  abstain  from  the  use  of 
flour  in  pastry,  and,  wherever  possible,  to  abandon  its  use 
in  other  articles  of  food  than  bread.  Horses,  he  indi- 
cated, should  be  fed  no  oats  or  other  grain  save  under 
permit,  and  permits  would  be  given  only  to  maintain  in 
the  national  interest  the  breed  of  horses. ^^ 

The  other  measure  adopted  to  rouse  the  public  was  the 
entrusting  of  the  campaign  for  voluntary  rationing  to 
a  War  Savings  Committee  and  to  its  1200  local  Commit- 
tees, similarly  named.  The  organization  of  the  latter 
was  flexible  and  locally  adaptable.  Economizing  schemes 
of  many  sorts  were  devised,  the  following,  for  instance, 
being  tried  at  Swansea.  The  Market  Superintendent 
was  appointed  "  Intelligence  Officer,"  and  was  instructed 
to  keep  in  touch  with  master  millers,  food  merchants, 
and  fishmongers,  publishing  on  the  basis  of  information 
thus  acquired  a  daily  bulletin  which  would  suggest  sub- 
stitutes for  foodstuffs.  A  central  war  kitchen  and  eight 
or  nine  ward  kitchens  were  equipped  with  electrical  and 
gas  stoves,  all  for  use  free  of  charge.  Cooking  lectures 
and  demonstrations  were  given  by  chefs  of  local  hotels 
and  by  qualified  teachers,  both  afternoons  and  evenings. 
To  spread  broadcast  the  King's  appeal,  copies  of  it  were 
distributed  at  every  cinema  show.  The  pledge  cards, 
22  M.  G.,  May  3,  1917. 


224 


WAR    TIME    CONTROL   OF    INDUSTRY 


which  the  Central  War  Savings  Committee  was  distribut- 
ing through  all  its  local  Committees,  were  sent  to  all 
places  of  worship  and  preachers  asked  hearers  at  the 
close  of  service  to  sign  them.^^  For  those  who  signed 
here  and  elsewhere  the  Government  issued  gold-coloured 
buttons  bearing  the  words,  "  On  Voluntary  Rations."  ^^ 
In  London  the  Metropolitan  Committee  issued  to  London 
restaurants  10,000  placards  on  which  were  printed 
''  Don't  waste  bread.  If  half  a  slice  is  enough  for  you, 
please  cut  the  whole  slice  in  half ;  do  not  break  it.  Every 
one  must  help  to  save  bread.  It  is  a  national  duty.  Will 
you  help?"^^  In  Manchester  a  campaign  for  instruc- 
tion in  cooking  substitute  foods  was  organized.  In  the 
windows  of  a  teaching  centre  were  displayed  some  forty 
kinds  of  cereals,  many  unfamiliar.  The  School  of  Do- 
mestic Economy  furnished  teachers.  One  week  the  lec- 
tures and  demonstrations  were  on  bread-making,  the  use 
of  oatmeal,  maize  puddings,  pastry  and  rice  dishes ;  next 
week  the  preserving  of  fruits  and  vegetables  was  demon- 
strated. A  motor  car,  fitted  up  to  give  open-air  demon- 
strations, could  be  secured  by  any  local  group  in  the  city, 
which  would  advertise  its  coming.^^  Portsmouth  sought 
assistance  from  the  postoffice,  the  schools,  and  the 
distributing  trades.  The  postofifice  circulars  were  dis- 
tributed to  every  household,  asking  occupants  to  reduce 
consumption;  the  teachers  in  the  schools  gave  lectures; 

23  L.  T.,  May  11,  1917. 
2*  M.  G.,  May  8,  16,  1917. 

25  L.  T.,  May  9,  1917. 

26  M.  G.,  Je.  23,  26,  1917. 


FOOD 


225 


even  the  bakers,  contrary  to  their  interest,  induced  people 
to  cut  down  consumption.  As  a  result,  this  town  of 
230,000  inhabitants  reduced  its  bread  consumption  to  an 
average  of  3  pounds  i  ounce  a  head  per  week,  nearly 
one-seventh  less  than  the  official  allowance.  In  view  of 
such  an  achievement  a  mass  meeting  of  citizens  demanded 
that,  if  compulsory  bread  rationing  should  be  adopted, 
Portsmouth  be  exempt.^' 

The  possibility  of  compulsory  rationing  reacted  from 
the  first  upon  the  voluntary  scheme.  At  the  time  of  the 
inception  of  the  latter  Lord  Curzon  declared  it  probable 
that  the  nation  would  be  driven  to  compulsory  rations 
and  that  for  his  own  part  he  thought  they  ought  to 
come.^^  When  Lord  Curzon  spoke,  however,  it  was  clear 
that  bread  cards  or  other  means  could  not  be  devised  and 
put  into  operation  until  two  or  three  months  later. 
Should  the  public  observe  the  King's  exhortation  and  re- 
duce the  consumption  of  bread  by  at  least  one-fourth, 
the  need  for  such  devices,  people  saw,  might  not  arise. 
That  voluntary  action  should  have  its  reward,  a  strong 
movement  was  soon  on  foot  to  exempt  from  any  com- 
pulsory system  which  might  be  adopted  such  towns  as 
imposed  rations  of  their  own  will.^*  Experiments  even 
in  retail  rationing  were  tried.  The  Pendleton  Co-op- 
erative Society  with  over  30,000  members  provided 
each  member  with  an  order-book  in  which  the  principal 

27  L.  T.,  Je.  25,  1917,  p.  3. 

28  M.  G.,  May  4,  1917,  p.  4. 

29  L.  T.,  May  5,  1917. 


22(> 


WAR    TIME    CONTROL   OF    INDUSTRY 


FOOD 


articles  of  food  were  printed  in  weekly  columns  and  shop- 
men were  instructed  to  limit  sales  where  they  suspected 
that  food  was  being  bought  in  excess  of  a  family's  im- 
mediate requirements.^^  It  was  a  premonition  of  the 
scheme  later  adopted  for  the  apportionment  of  sugar. 

Owing  to  these  various  efforts,  compulsory  rationing 
was  for  the  time  avoided.  While  the  consumption  of 
bread  and  flour  during  May  was  practically  the  same  as 
during  May,  1916,  in  June  there  was  a  reduction  of  3>^ 
per  cent,  and  in  July  one  of  7  per  cent,  over  the  figures  of 
a  year  before.  At  least  such  was  the  first  optimistic  con- 
clusion of  the  Ministry  of  Food  based  upon  returns  from 
6000  retailers  who  represented  from  one-fourth  to  one- 
third  of  the  consumers  of  the  United  Kingdom.  These 
returns  were  confirmed  by  others  relating  to  the  delivery 
of  flour  from  the  mills.  The  reduction,  it  seems,  had 
been  more  substantial  in  large  towns  than  in  country  dis- 
tricts, greater  in  England  and  Scotland  than  in  Ireland 
and  Wales,  greater  in  Lancashire,  Yorkshire,  and  the 
North  than  in  the  Midlands  and  the  South.  There  had 
been,  too,  a  considerable  reduction  in  the  use  of  flour  for 
industrial  purposes.^^ 

These  gratifying  returns,  however,  were  not  borne  out 
by  later  information.  In  September  Lord  Rhondda  ex- 
pressed his  disappointment  at  finding  how  slight  had  been 
the  fall  in  the  consumption  of  flour  during  the  last  two 
months.     The  supply  of  potatoes  was  then  abundant  and 

»o  M.  G.,  May  5,  iQi?,  P-  6. 
31 L.  T.,  Aug.  21,  1917,  p.  8. 


4 


227 


•^ 


I 


i^ 


4 


\ 


considerable  substitution  had  been  hoped  for.  The  fact 
that  some  persons  had  saved  more  than  a  pound  of  flour 
a  week  showed  that  in  many  cases  no  effort  whatever 
had  been  made.'^^  \^  ^^g  clear,  in  short,  that  while  the 
campaign  for  voluntary  economy  had  had  transient  and 
local  successes,  it  had  achieved  little  more. 

Two  circumstances  now  conspired  to  necessitate  a  re- 
newal of  effort.  In  October,  as  will  be  explained,  the 
Government  put  on  the  market  a  subsidized  9  d.  loaf, 
thereby  reducing  the  price  of  bread  by  one-fourth.  Con- 
sumption, as  w^as  expected,  increased.  At  the  same  time 
it  became  matter  of  public  information  that  the  world's 
cereal  harvest  of  the  year  would  be  inadequate.  The 
Government  had,  it  is  true,  by  summer  purchases  acquired 
a  larger  reserve  of  wheat  than  was  on  hand  a  year  earlier. 
Instead  of  6,480,000  quarters,  there  were  in  the  country 
in  August  8,500,000  quarters.33  But  official  information 
came  from  America  that  the  United  States  and  Canada 
would  have  400  million  bushels  of  wheat  less  than  enough 
for  the  Allies  and  neutrals,  and  that  Mr.  Hoover  had 
urged  Americans  to  reduce  consumption  by  one  pound  a 
week.2*  Under  the  circumstances  a  diminished  con- 
sumption in  England  became  imperative. 

As  earlier  in  the  year,  the  Food  Controller  decided  to 
try  appeal  before  resorting  to  compulsion.  Sir  Arthur 
Yapp,  who  had  done  admirable  work  for  the  Y.  M.  C.  A., 

32  Ibid.,  Sept.  12,  p.  3. 

33  Ibid.,  Aug.  17,  p.  8. 
3*  Ibid.,  Sept.  12,  p.  3. 


^ 


228 


WAR    TIME   CONTROL   OF    INDUSTRY 


was  prevailed  upon  to  become  Director  of  Food  Economy. 
At  once  he  formulated  a  plan  of  campaign.  In  October 
an  organization  should  be  perfected  and  conferences  held 
with  various  bodies  whose  help  it  was  desired  to  enlist ; 
in  November  a  "  flood  of  oratory  "  was  to  be  let  loose 
over  the  country  and  members  of  Parliament  would  be 
asked  to  address  their  constituents;  in  December  the 
kitchen  would  be  invaded  and  the  campaign  brought  im- 
mediately into  the  homes  of  the  people.  Throughout  the 
three  months,  effort  would  be  directed  toward  the  estab- 
lishment of  communal  kitchens  on  a  national  scale,  to- 
ward the  collection  of  waste  materials,  toward  a  mobil- 
ization of  the  press.^^  The  kitchens  would  have  no 
charitable  aspect,  but  would  endeavour  to  prepare  whole- 
some meals  at  moderate  prices  and  to  teach  people  the 
use  of  substitutes  for  bread  and  meat.^^  The  Local  Food 
Control  Committees  were  urged  to  appoint  each  a  Food 
Economy  Committee  of  some  twelve  members  representa- 
tive of  all  classes  in  the  community.^^  Finally,  a  League 
of  National  Safety  was  to  be  desired.  At  first  it  might 
comprise  only  10,000,  but  these  first  members  should  by 
house-to-house  visiting  bring  the  membership  up  to  100,- 
000  and  eventually  to  1,000,000.^^ 

The  new  ration  which  was  to  be  urged  upon  the  con- 
sumer was  made  public  in  November.  The  hard  and 
fast  lines  of  Lord  Devonport's    allowance  were  replaced, 

35  Ibid.,  Oct.  10,  p.  8. 

36  Ibid,,  Sept.  25,  p.  5. 

37  Ibid.,  Oct.  15,  p.  3- 

38  Ibid.,  Oct.  13,  p.  3. 


FOOD 


229 


SO  far  as  bread  was  concerned,  by  a  sliding  scale,  and 
this  was  based  upon  the  severity  of  the  manual  work 
done  by  the  consumer.  Men  engaged  in  heavy  industrial 
or  agricultural  work  were  allowed  8  lbs.  of  bread  a  week, 
men  engaged  in  ordinary  industrial  or  other  work  7  lbs., 
men  unoccupied  or  engaged  in  sedentary  work  4  lbs.  8 
oz. ;  corresponding  groups  of  women  were  allowed  8  lbs., 
4  lbs.,  and  3  lbs.  8  oz.  In  the  case  of  other  foods  which 
were  rationed,  there  was  no  differentiation  between 
adults,  while  no  regulations  were  made  touching  children. 
Of  cereals  other  than  bread  the  weekly  ration  was  12  oz., 
of  meat  2  lbs.  (a  reduction  of  Yz  lb.),  of  sugar  8  oz. 
(unchanged),  of  butter,  margarine,  lard,  oils,  and  fats 
10  oz.  The  inclusion  of  the  last  item  was,  like  the  slid- 
ing scale,  an  innovation,  and  was  probably  due  to  the 
shortage  in  fats  which  had  arisen.^^ 

Behind  these  varied  aspects  of  voluntary  endeavour 
lay  compulsory  rationing.  It  was  now  much  more  a  pos- 
sibility than  it  had  been  in  the  summer  and  Lord  Rhondda 
declared  that,  if  voluntary  measures  failed,  he  would  have 
no  hesitation  in  resorting  to  it.  Already  in  October  his 
department  was  working  out  a  scientifically  graded 
scheme.  Taking  into  consideration  the  available  sup- 
plies and  the  needs  of  all  the  Allies,  the  Ministry  of  Food 
was  endeavouring  to  find  out  what  food  should  be  al- 
lotted to  every  man,  woman,  and  child  in  the  United  King- 
dom, regard  being  had  to  age,  occupation,  and  other  con- 
siderations.    Sometimes  definite  sacrifices  might  be  nec- 

39  Ibid.,  Nov.  13,  p.  6. 


230 


WAR    TIME    CONTROL    OF    INDUSTRY 


l» 


essary.  At  the  moment,  for  example,  there  was  great 
shortage  of  ham  and  bacon.  Since  miners  found  bacon 
essential,  other  people  should  refrain  from  eating  it  as 
long  as  the  scarcity  continued.^^  Such  was  the  rationing 
scheme  which  impended  in  the  autumn  of  191 7- 
Whether  it  should  be  enforced  would  depend  upon  the 
success  of  the  last  energetic  appeals  to  voluntary  re- 
straint. 

While  voluntary  rationing  thus  ran  its  variable  course, 
the  Government  continued  to  formulate  less  comprehen- 
sive regulations.  The  Public  Meals  Order  of  April  pro- 
duced better  immediate  results  than  Lord  Devonport  had 
hoped  for.  Returns  from  eight  large  hotels  for  the  week 
ending  April  21  showed  six  of  them  using  less  than  2 
lbs.  of  flour  per  head  weekly,  one  using  2>^  lbs.  and  the 
Savoy  using  3.39  Ibs."*^  Since  the  allowance  was  3>^ 
lbs.  and  the  consumption  of  even  all  of  it  would  have 
resulted  in  a  saving  of  53  per  cent,  over  the  consumption 
of  the  preceding  November,  the  order  was  accomplishing 
much.  Early  in  May  the  Government  forbade  the  send- 
ing of  cereal  products  in  parcels  to  the  soldiers  at  the 
front.  The  British  soldier's  ration,  it  explained,  was  the 
best  in  the  world  and  there  was  no  present  intention  of 
reducing  it.  Generous  gifts  of  cakes,  puddings,  and 
biscuits  sent  by  friends  led  to  undesirable  waste.^^  Ger- 
man prisoners,  conversely,  were  not  allowed  to  buy  meat, 
flour,  or  sugar,  in  addition  to  their  allowance  or  to  re- 

40  Ibid.,  Oct.  T3,  p.  3. 

41  Ibid.,  May  g,  p.  3. 

42  Ibid.,  May  10. 


FOOD 


231 


ceive  any  article  containing  these  ingredients.^^  At  the 
same  time  the  Food  Controller  prohibited  except  under 
licence  the  manufacture  of  starch  from  cereals.  Sup- 
plies of  starch  would  henceforth  be  conserved  for  collars, 
shirts  being  starchless,  and  the  public  were  asked  to  dis- 
pense with  starch  in  table  cloths,  napkins,  and  blouses.^^ 
In  May  the  making  of  dog  biscuits  also  was  forbidden, 
while  the  feeding  of  grain  to  pheasants  and  other  game 
had  for  four  months  been  unlaw ful.^^ 

Cases  concerned  with  the  waste  of  food  began  to  grace 
the  annals  of  the  police  courts.  At  Chester,  James  Cottle, 
Limited,  restaurant  proprietors,  were  indicted  for  con- 
signing to  the  waste  bin  two  pounds  of  bread.  In  de- 
fence it  was  urged  that  the  bread  consisted  of  scraps  from 
customers'  plates,  which  could  not  well  be  served  again. 
But  the  sanitary  inspector  maintained  that  in  the  bin 
were  crusts  from  the  ends  of  loaves,  and  the  magistrate 
imposed  a  fine  of  £5.^*^  Quite  as  severe  was  the  judg- 
ment meted  out  to  Louisa  Heritage  of  Bromley.  Al- 
though the  Inspector  had  some  weeks  before  spoken  to 
her  about  bread  and  fat  found  in  her  dust  bin,  four  pounds 
of  bread  in  the  shape  of  slices  and  crusts  were  again  dis- 
covered there.  Interviewed  by  the  Inspector,  she  declared 
that  she  had  intended  to  make  a  bread  pudding  of  the 
fragments  but  had  found  them  mildewed.  '*  I  could  not 
even  give  it  to  the  poor  ducks,"  she  complained.     When 

*3M.  G.,  May  i,  191 7. 

**L.  T.,  May  11,  1917. 

*5M.  G.,  May  i,  1917;  L.  T.,  Jan.  12. 

*«M.  G.,  May  24,  1917. 


232 


WAR    TIME    CONTROL   OF    INDUSTRY 


told  that  the  matter  would  be  reported,  she  retorted, 
"  Pooh,  it  is  not  stolen.  It  is  bread  I  have  paid  for  and 
I  can  do  as  I  please."  The  Bench,  remarking  that,  while 
others  were  doing  all  they  could  to  save  bread,  she  was 
wilfully  throwing  it  away,  pronounced  sentence  of  two 
months*  imprisonment,  or  £5  fine."*^  In  such  ways  did 
the  new  regulations  come  home  to  the  recalcitrant,  how- 
ever obscure  they  might  be. 

The  two  aspects  of  food  regulation  thus  far  described 
looked  toward  the  economizing  of  cereals,  especially 
wheat.  A  third  aspect  had  regard  to  the  protection  of 
the  consumer  by  the  establishment  of  maximum  prices. 
Before  November,  19 16,  the  Government,  so  far  as  food- 
stuffs were  concerned,  controlled  only  the  price  of  sugar 
and  influenced  only  the  prices  of  foreign  meat  and  for- 
eign wheat.  Other  imported  products  and  all  home 
products  were  left  to  the  play  of  market  influences.  As 
Mr.  Runciman  pointed  out  in  the  Commons  during  his 
speech  of  November  15,  maximum  prices  could  be  easily 
fixed  for  such  imported  foodstuffs  as  were  controlled  by 
the  Government.  If,  however,  the  commodity  was  im- 
ported but  not  controlled,  or  if  it  were  a  home  product, 
difficulties  might  arise.  In  the  one  case,  maximum  prices 
might  drive  the  commodity  from  British  shores;  in  the 
other,  they  might  check  its  production. 

The  Government,  he  went  on  to  say,  did  not  for  the 
time  being  intend  generally  to  fix  maximum  prices  for 
foodstuffs  not  under  its  control.     But  there  were  some 


*7  L.  T.,  May  15,  1917. 


FOOD 


233 


things  relative  to  which  it  seemed  possible  to  check  rising 
prices  yet  not  endanger  the  maintenance  of  the  supply. 
To  accomplish  this,  the  method  so  often  employed  would 
be  again  tried;  the  cost  of  production  would  be  ascer- 
tained and  to  it  would  be  added  a  reasonable  profit.*^ 
Commodities,  which,  he  explained,  seemed  to  invite  such 
regulation  at  once  were  milk  and  potatoes.  Orders 
were,  accordingly,  soon  issued  prescribing  retail  prices 
for  both.  Since  these  experiments  preceded  somewhat 
any  similar  action  regarding  bread,  it  may  be  permissible 
to  digress  briefly  and  explain  the  procedure. 

The  case  of  potatoes  was  more  abnormal  than  that  of 
milk,  since  the  demand  of  the  army  for  potatoes  was  much 
greater  and  the  potato  crop  of  19 16  had  been  very  poor. 
In  September,  19 16,  Mr.  Runciman  explained  that  the 
Government  had  had  to  take  possession  of  enormous 
quantities  not  only  to  feed  the  army  but  to  distill  spirits 
for  the  manufacture  of  explosives.^^  In  November  he 
added  that  it  did  not  help  the  buying  for  the  army  to 
have  it  stated  in  the  Commons  that  a  profit  of  £62  per 
acre  had  been  made  on  potatoes  in  Lincolnshire.  At  any 
rate  the  Government  would  soon  put  a  stop  to  undue 
profits;  and  the  problem  was  the  more  urgent  since  the 
shortage  would  most  affect  Ireland  and  the  poor.^^ 

The  first  step  toward  meeting  the  situation  was  the 
order  of  November  20,  requiring  a  return  of  stock  from 
any  person  cultivating  more  than  ten  acres  of  potatoes 


48  P.  D.  C,  1916,  LXXXVII,  859. 
*^  M.  G.,  Sept.  29,  1916,  p.  12. 
50  P.  D.  C,  loc.  cit.,  p.  854. 


234 


WAR   TIME   CONTROL   OF    INDUSTRY 


in  Great  Britain.''^  Next,  as  a  measure  of  security,  po- 
tatoes needed  for  seed,  a  very  large  percentage  of  the 
crop,  were  withdrawn  from  the  consumer's  market  and 
provision  was  made  for  their  distribution  throughout 
such  villages  of  the  United  Kingdom  as  might  require 
them.^^  In  the  third  place,  the  Government  on  January 
9,  guaranteed  minimum  prices  for  the  19 17  crop.  In 
view  of  the  possibility  of  an  unfavourable  season,  115  s. 
per  ton  was  set  as  a  minimum  price  for  potatoes  delivered 
from  September  15,  1917,  to  January  31,  1918,  120  s.  for 
those  delivered  in  February  and  March,  130  s.  for  those 
delivered  during  the  rest  of  the  season.^^  When  Sep- 
tember, 19 1 7,  came,  a  new  order  substituted  a  flat  rate 
for  this  graduated  scale.  No  grower  might  after  the 
middle  of  the  month  sell  potatoes,  other  than  seed  pota- 
toes, for  less  than  120  s.  or  for  more  than  130  s.^^  The 
fixing  of  liberal  minimum  prices  had  already  proved  its 
effectiveness.  Farmers  had  put  100,000  additional  acres 
under  potatoes,  allotment  gardeners  had  responded,  and 
the  191 7  crop  was  proving  an  abundant  one.^^ 

On  February  i,  19 17,  the  Food  Controller  had  also 
fixed  the  retailers'  price  for  potatoes.  This  was  set  at 
ij^  d.  the  lb.,  although  on  the  market  2  d.  or  even  23/2  d. 
was  being  charged.  At  i>^  d.  the  price  per  ton  was  £14, 
the  very  sum  which  retailers  at  the  moment  were  paying 

51 B.  T.  J.,  Nov.  23,  1916,  p.  571. 

52  Ibid.,  Dec.  21,  pp.  861,  863. 

53  L.  T.,  Jan.  20,  191 7. 
5*  Ibid.,  Sept.  14,  p.  8. 
55  Ibid.,  Oct.  9,  p.  9. 


FOOD 


235 


for  their  stocks.  Unless  they  could  buy  for  £10  10  s. 
per  ton  they  would  be  without  profit;  and  at  £10  10  s. 
wholesalers  refused  to  sell,  saying  that  transportation 
cost  them  from  £3  to  £4.  The  Food  Controller  had  also 
fixed  the  price  for  which  growers  might  sell,  but  not  de- 
liver, to  wholesalers  at  £8,  and  had  declared  that  the 
difference  between  £8  and  £14  was  sufficient  to  cover 
transportation  charges,  the  profits  of  wholesalers,  and  the 
profits  of  retailers.  Let  wholesalers  and  retailers  divide 
the  £6  between  them.  Adjust  the  matter  the  two  dis- 
tributing trades  would  not  and  a  potato  famine  impended. 
On  February  19  the  Government  intervened.  The 
grower  was  instructed  to  sell  and  deliver  to  the  whole- 
saler potatoes  at  £9  per  ton,  the  wholesaler  to  sell  them 
to  the  retailer  at  £10  10  s.  After  March  31  these  prices 
were  to  change  to  £10  and  £11  10  s.  respectively,  and  the 
consumer  ultimately  was  to  pay  the  advance  by  being 
charged  i;^^  d.  per  Ib.^^ 

It  took  greengrocers  some  time  to  adapt  themseWes  to 
the  potato  orders  and  from  February  on  charges  and 
judgments  against  them  in  the  courts  were  not  infre- 
quent.*'^^ Farmers,  too,  got  into  trouble.  At  Spalding, 
G.  H.  Goose,  farmer,  paid  two  fines  of  £50  for  selling  po- 
tatoes above  the  maximum  price,^^  and  at  the  end  of  the 
season  an  extremely  heavy  penalty  was  inflicted.  George 
Thompson,  a  Lincolnshire  farmer,  pleaded  guilty  to  55 
summonses.     It  appeared  that  he  had  sold  1320  tons  of 

56  Ibid.,  Feb.  17,  19. 

57  Ibid.,  Mar.  i,  p.  9;  Mar.  10,  p.  3. 

58  M.  G.,  May  16,  1917. 


•  .^,i(.j!*M>»««»««»*l««>-W»<***'*"^ 


236 


WAR    TIME    CONTROL    OF    INDUSTRY 


FOOD 


237 


potatoes  at  an  average  of  £15  a  ton,  whereas  he  should 
have  charged  £11   10  s.,  dehvering  them  to  the  retailer. 
His  excess  profit  since  April  i  had  thus  been  £4620  and 
another  £500  had  to  be  added  for  earlier  transactions. 
Although  the  defence  urged  that  Mr.  Thompson  was  a 
pioneer  in  potato  growing,  a  self-made  man  now  seventy- 
four  years  old,  a  farmer  of  some  of  the  finest  land  in 
Lincolnshire,  that  the  order  made  no  proper  distinctions 
as  to  the  quality  of  the  produce,  and  that  foreign  potatoes 
brought  £40  a  ton,  the  court  was  firm.     A  fine  of  £5500 
was  imposed  and  the  heavy  costs  of  £250  were  added. ^^ 
It  was  a  case  to  which  members  of  the  food  administra- 
tion henceforth  pointed  with  satisfaction  when  discussing 
the  charge  of  profiteering. 

The  Government  had  learned  that  it  must  intervene  at 
every  stage  in  the  process  of  distribution.     Accordingly 
the  Potato  Order  of  September,  191 7,  after  assuring  the 
grower  £6  a  ton  provided  that  from  October  i  the  profits 
of  wholesale  dealers,  including  overhead  charges,  must 
not  exceed  an  average  of  7  s.  6  d.  a  ton  except  on  seed 
potatoes.     From  the  same  date,  retailers  might  not  sell 
at  more  than  i  d.  a  pound  if  their  purchase  was  made  at 
between  6  s.  and  7  s.  6  d.  per  cwt,  or  at  more  than  lyi  d. 
if  they  had  paid  more  than  7  s.  6  d.     All  dealers  other 
than  growers  must  henceforth  be  registered  if  they  wished 
to  sell.^^     Thus  after  a  few^  months'  experience  in  price- 
fixing  the  Government  felt  itself  able  to  act  with  decision; 

«»L.  T.,  Sept.  5,  191 7,  p.  5. 
60  Ibid.,  Sept.  14,  p.  8. 


and  the  abundant  potato  crop  of  1917,  together  with  the 
absence  of  complaint  relative  to  the  September  order, 
seemed  to  indicate  that  an  equitable  scale  of  prices  had 
been  established. 

The  fixing  of  the  price  of  milk  was  prompted  by  more 
general  motives  than  was  the  fixing  of  the  price  of  po- 
tatoes. A  scanty  crop  lay  immediately  behind  the  potato 
situation  of  the  end  of  19 16,  but  the  slowly  rising  price 
of  milk  was  induced  by  other  causes  than  seasonal  short- 
age. The  Committee  which  reported  in  September  on 
the  high  prices  of  meat,  milk,  and  bacon  pointed  to  the 
more  urgent  demand  for  milk  and  to  the  increased  cost 
of  production.  Manufacturers  of  margarine,  tinned 
milk,  and  milk  chocolate  had  added  their  demands  to 
those  of  the  hospitals,  while  the  high  price  of  cheese  re- 
acted upon  the  price  of  milk.  Of  the  heightened  costs 
of  production,  that  of  labour  was  not  least,  and  from 
sheer  lack  of  milkers  many  farmers  were  reducing  their 
herds. 

Whereas  the  retail  price  for  milk  in  London  before  the 
war  had  been  4  d.  a  quart,  the  Committee  continued,  it 
had  by  September,  19 16,  risen  to  5  d.  in  North  and  East 
London,  to  6  d.  in  West  London.  What  seemed  pretty 
clear  was  that  the  increase  had  gone  largely  to  the  pri- 
mary producers,  not  in  any  considerable  degree  to  the 
retailers.  Even  before  the  war  the  retailer's  margin  had 
been  falling,  and  now  dividends  were  steadily  declining. 
The  Express  Dairy  Company's  dividend,  for  example, 
had  fallen  from  8  per  cent,  in  19 13  to  7  per  cent,  in  19 14 


238 


WAR    TIME    CONTROL   OF    INDUSTRY 


and  to  5  per  cent,  in  1915.  On  the  other  hand,  wholesale 
distributors  had  prospered,  even  allowing  for  high  costs 
of  distribution.^^ 

In  Parliament  the  charge  that  associations  of  dairymen 
were  making  the  profit  and  manipulating  the  price  was 
reiterated.     The  Somerset  and  Wiltshire  Farmers'  As- 
sociation refused  to  sell  its  product  in  Bournemouth  at 
a  certain  price,  but  encouraged  its  members  to  give  the 
milk  to  the  pigs.     Although  the  Board  of  Trade  had  an- 
nounced that  I  s.  4  d.  per  gallon  was  a  sufficient  price  for 
milk  in  London  and  large  towns,  the  Cheshire  Farmers' 
Association  demanded  is.  5  d.,  threatening  if  this  were 
refused  to  convert  its  milk  into  cheese.     The  United 
Dairies  Company  (Limited),  which  supplies  London  with 
70  per  cent,  of  its  milk,  was  not  in  the  habit  of  allowing 
any  one  of  its  customers,  even  should  he  wish,  to  sell  at 
a  price  below  that  ruling  in  the  district.^^     jy^^  producer, 
however,   had   his   defenders.     No  dairyman,   said   Mr. 
Prothero,  could  make  a  profit  of  more  than  J4  d.  a  quart 
in  producing  milk  at  4  d.     Sir  John  Spear  declared  that 
both  feeding  stuffs  and  labour  were  50  per  cent,  dearer 
than  before  the  war,  while  milch  cows  for  the  dairy  cost 
35  per  cent,  more.^^ 

In  view  of  all  these  circumstances  the  determination 
of  the  price  of  milk  became  a  somewhat  hazardous  un- 
dertaking.    The  order  of  November  21,  1916,  imposed  a 

«i  Cd.  8358. 

«2  p.  D.  C,  1916,  LXXXVT,  440,  457;  M.  G.,  Oct.  20,  1916,  p.  4. 
«3  P.  D.  C,  1916,  LXXXVII,  880,  933. 


FOOD 


239 


double  limit.     The  price  might  not  be  greater  than  that 
paid  on  November  15,  19 16,  and  furthermore  might  not 
exceed  by  more  than  a  specified  amount  the  price  in  the 
corresponding  month  before  the  war.     For  retail  milk 
this  amount  was  2  d.  a  quart  to  be  added  to  a  pre-war 
price  of  4  d.,  for  wholesale  milk  from  5>4  d.  to  6>^  d.  a 
gallon  to  be  added  to  a  pre-war  12  d.  or  13  d.^*     A  month 
later  the  first  limitation  was  removed,  and  the  maximum 
price  of  wholesale  "  accommodation  "  milk  was  raised  to 
IS.  8  d.  per  gal.^^     By  March  the  Food  Controller  an- 
nounced that  these  maximum  prices  might  in  time  create 
difficulties  for  farmers  and  might  lessen  production.     To 
prevent  the  latter  contingency  the  prices  for  the  following 
winter  would,  he  declared,  be  fixed  early  and  would  make 
the  production   of   milk   profitable  in  comparison  with 
other  farming  activities.^^     A  Committee  appointed  by 
the  Food  Controller  in  June  recommended  that  the  retail 
price  of  milk  from  June  15  to  September  30  be  7  d.  the 
quart,  and  a  Committee  of  the  Board  of  Agriculture 
urged  the  prompt  fixing  of  prices   for  the  winter  of 
1917-18.^^     In  July  the  Council  of  the  British  Dairy 
Farmers'  Association  sent  to  the  Government  its  resolu- 
tion that  the  price  of  milk  should  from  August  i  be  raised 
for  both  producers  and  consumers,  since  at  that  time  pro- 
duction would  be  reduced  and  farmers  would  be  obliged 
to  use  high-priced  feeding  stuffs  to  maintain  the  supply. 

6*  B.  T.  J.,  Nov.  23,  1916,  p.  570. 

65  Ibid.,  Dec.  21,  p.  861. 

66  Ibid.,  Mar.  29,  1917. 

67  L.  T.,  Je.  27,  1917,  P-  7. 


p^  mi\^  »-^*-^*  i» 


240 


WAR    TIME   CONTROL   OF    INDUSTRY 


Both  producers  and  distributors,  the  resolution  con- 
tinued, carried  on  their  business  with  no  profit  during  the 
last  two  winters  and  in  many  cases  with  serious  loss. 
From  October  i  a  further  rise  in  price  for  the  winter 
would  be  necessary  to  prevent  abandonment  of  the  milk 
trade  by  many  engaged  in  it.  The  Government  should 
make  announcements  at  once  to  prevent  dairy  herds  from 
being  depleted.^^ 

Thus  reminded  of  its  promise,  the  Government  early 
in  September  issued  its  scale  of  prices.     For  London  and 
other  large  cities  milk  would  be  delivered  by  retailers  at 
7  d.  a  quart  during  October,  at  8  d.  thereafter  until  the 
end  of  March;  within  the  area  of  rural  district  councils 
in  England  and  Wales  and  in  districts  other  than  burghs 
in  Scotland,  the  corresponding  prices  would  be  6  d.  and 
7  d.     Wholesale   prices    for  the   producer   were   to   be 
IS.   5  d.   a  gallon   during   October,    i  s.    jyi  d.    during 
November,  is.  9 d.  thereafter  until  the  end  of  March. 
For  any  other  person  than  the  producer,  the  wholesale 
prices  were  i  s.  8  d.  or,  for  "  accommodation  "  milk,  i  s. 
10  d.   a   gallon   during  October,   afterward   2  s.   or   2  s. 
2  d.^^     These  prices,  as  had  been  promised,  were  liberal 
for  the  producer,  and  the  only  misgiving  to  which  Lord 
Rhondda  confessed  regarding  them  was  that  milk  would 
be   costly    for   poor    families.     For   children   he   hoped 
to  make  some  arrangement  by  which  it  could  be  had 
more  cheaply.'''^     As  in  the  case  of  potatoes,  govern- 

«8  Ibid.,  Jy.  14. 

*^  Ibid.,  Sept.  TO,  p.  lo. 

70  Ibid.,  Oct.  10,  p.  7. 


FOOD 


241 


mental  price  fixing  had  been  generous  to  the  producer, 
and  any  danger  of  shortage  was  apparently  avoided. 

When  Mr.  Runciman  on  November  15,  19 16,  told  the 
House  of  Commons  that  the  Government  could  probably 
check  the  increasing  prices  of  certain  commodities  not 
under  its  control,  he  had  immediate  reference  only  to 
milk  and  potatoes.     In  the  case  of  bread  and  home-grown 
wheat  there  was  then  no  intention  of  fixing  maximum 
prices.^i     Against  this  resolve  and  against  the  dilatory 
action  of  the  Government,  the  War  Emergency  Workers' 
National  Committee  soon  protested.     Pointing  out  that 
coal  and  milk  were  already  high,  it  went  on  to  demand 
that   the   Board   of   Trade   commandeer   all   stocks   of 
wheat,   potatoes,    and   other  necessary  produce   in  the 
country  at  prices  based  upon  the  actual  cost  of  produc- 
tion.^2 

The  Government,  however,  adhering  to  its  plan,  fixed 
only  the  prices  of  milk  and  potatoes,  the  former  in  No- 
vember, 1916,  the  latter  in  February,  1917.     Regarding 
grains  it  did  nothing  until  April.     Then  on  the  i6th  of 
that  month  the  Food  Controller  yielded  to  the  long  con- 
tinued popular  demand  and  announced  that  henceforth 
the  maximum  prices  of  grains  harvested  in  1916  would 
be  78  s.  per  quarter  for  wheat,  65  s.  for  barley,  55  s.  for 
oats.^3     Since  these  prices  were  considerably  below  those 
ruling  in  the  market,  farmers,  who  for  one  reason  or  an- 
other had  held  back  their  wheat,  suffered  a  loss  of  8  s.  or 

Ti  P.  D.  C,  1916,  LXXXVII,  860. 

72  M.  G.,  Dec.  2,  1916,  p.  8. 

73  B.  T.  J.,  Apr.  19,  1917- 


.-P-^fflW,™!'*"!!*!^    IWe^  Stc#*»^.fB*^ilf"  V- 5Sfei,.-3SKfP--^ 


242 


WAR    TIME    CONTROL    OF    INDUSTRY 


10  s.  a  quarter.'^     In  May  several  maximum  retail  prices 
were  set.     For  all  forms  of  maize  flour  only  3><  d.  per 
lb.  might  be  asked,  for  oatmeal  4>^  d.  in  Scotland,  5  d. 
elsewhere    in    the    United    Kingdom.     The    authorized 
prices   for  peas  and  beans  were  somewhat  under  what 
many  retailers  had  paid   for  their  stores.     But  grocers 
had  for  months  reaped  the  harvest  of  a  rising  market 
and  could  afford  to  suffer  some  loss.*^^     At  the  end  of 
June  all  orders  of  the  Food  Controller  relative  to  prices 
were  printed  in  lists  which  every  grocer  was  asked  to 
post.     The    commodities    affected    were    barley,    beans, 
cerealine  (maize  meal),  chocolate,  hominy,  lentils,  maize, 
milk,  oatmeal,  peas,  potatoes,  sugar,  swedes,  sweetmeats, 
wheat.     Meat  did  not  appear  on  the  list,  since,  although 
certain    restrictions    had    been    placed    on    middlemen's 
profits,  no  retail  prices  had  yet  been  fixed/^ 

In  June,   191 7,  Lord  Rhondda,  a  very  able  business 
man,    succeeded    Lord    Devonport   as    Food    Controller. 
New  authority  was  at  once  bestowed  upon  him  and  he 
acquired  many  of  the  powers  which  the  Admiralty,  the 
Army  Council,  and  the  Ministry  of  Munitions  had  long 
possessed.     He  might  requisition  the  whole  or  a  part  of 
the  output  of  any  factory,  paying  therefor  a  price  based 
on  the  cost  of  production  plus  a  reasonable  pre-war  rate 
of  profit.     To  determine  this  price  he  might  examine  the 
factory's  books.     To  a  merchant  he  might  pay  what  the 

7*L  T.,  Aug.  16,  1917,  p.  3. 
"M.  G.,  May  24,  31,  1917. 
7«  Ibid.,  Je.  28,  p.  2. 


FOOD 


243 


merchant  paid,  plus  a  pre-war  rate  of  profit,  although,  if 
a  middleman  or  speculator  had  acquired  commodities 
otherwise  than  in  the  normal  course  of  his  business,  the 
profit  might  be  reduced  or  refused  altogether."^^ 

Soon   Lord    Rhondda   received   the  War   Emergency 
Workers'   National   Committee   and   seemed   favourably 
disposed   toward   its   reiterated   demands.     These   were 
now  comprehensive.     After  commandeering  all  ships  and 
controlling  all  transport  facilities,  the  Government  should 
purchase  all  essential  imported  foodstuffs ;  it  should  con- 
trol all  home-grown  food  products,  such  as  wheat,  meat, 
oats,  barley,  potatoes,  and  milk,  determining  prices  for 
the  consumer  and  apportioning  food  to  families ;  it  should 
sell  bread  during  the  war  and  for  six  months  after  at  a 
price  not  exceeding  6  d.  per  loaf,  itself  meeting  any  loss; 
it  should  create  municipal  and  other  local  authorities  to 
exercise  food  control  and  should  appoint  to  them  repre- 
sentatives of  labour,  of  co-operative  societies,  and  of 
women's  industrial  organizations."^^ 

On  June  26,  the  new  Food  Director  announced  that  he 
would  control  more  stricdy  the  industries  engaged  in  the 
production  of  foodstuffs.  Later  on  he  summarized  his 
plans  as  follows :  "  My  policy,  broadly  speaking,  is  to 
fix  the  price  of  those  articles  of  prime  necessity  over  the 
supply  of  which  I  can  obtain  effective  control  at  all  stages 
from  the  producer  down  to  the  retailer.  Such  prices 
will,  as  far  as  possible,  be  fixed  on  the  principle  of  allow- 

''^Ibid.,  Je.  30,  p.  4. 
78  Ibid.,  Je.  23,  p.  7. 


,    WrfaSS'SSIl****'/-   '' 


244 


WAR    TIME    CONTROL   OF    INDUSTRY 


FOOD 


245 


ing  a  reasonable  profit  to  those  engaged  in  the  production 
and  distribution  of  the  particular  commodity.  Indeed 
the  policy  will  in  effect  be  one  of  determining  profits  at 
every  stage,  though  it  will  take  the  form  of  fixing  prices. 
Every  effort  will  be  made  to  prevent  speculation  and  un- 
necessary middlemen  will  be  eliminated.  Existing  agen- 
cies —  I  make  a  strong  point  of  this  —  will  be  utilized 
for  purposes  of  distribution  under  licence  and  control  and 
under  the  supervision  of  local  food  controllers  appointed 
by  the  local  authorities."  '^^ 

In  the  execution  of  such  a  policy  the  first  step  was  to 
determine  the  cost  of  production  and  handling.     A  cost- 
ings department  was  accordingly  set  up  in  the  Ministry 
of  Food  and  acquired  full  power  to  examine  books  and 
other  sources  of  information.     By  August  arrangements 
had    been    completed.     Leading    firms    of    accountants, 
twelve  for  England,  three  for  Scotland,  and  three  for 
Ireland,  were  invited  by  the  Food  Controller  to  act  in  an 
honorary  capacity  as  supervising  accountants  for  their 
districts.     All  were  placed  under  the  immediate  super- 
vision of  Mr.  W.  H.  Peat,  Financial  Secretary  of  the 
Ministry  of  Food.     Prices  were  worked  out  with  refer- 
ence to  costs  and  normal  pre-war  rates  of  profit.^^     It 
was  the  method  by  which  the  Army  Contracts  Depart- 
ment had  been  purchasing  essential  supplies,  like  woollens 
and  boots,  at  prices  below  those  ruling  in  the  market. 

79  L.  T.,  Sept.  12,  1917,  p.  3. 

80  Ibid.,  Je.  27,  p.  7;  Aug.  15,  p.  3. 


Soon  this  activity  began  to  bear  fruit.  How  maximum 
prices  were  fixed  or  revised  for  potatoes,  for  meat,  and 
for  milk  has  been  described.  It  remains  to  consider  the 
fortunes  of  wheat,  flour,  and  bread. 

In  the  Commons  on  July  25,  Mr.  Clynes,  the  Assistant 
Food  Commissioner,  explained  what  would  be  done  rela- 
tive to  the  price  of  bread.     The  measure,  even  in  the  days 
of  novelties,  was  unusual.     To  quiet  the  complaint  about 
the  rising  cost  of  this  commodity,  the  price  of  the  quartern 
loaf,  about  one  shilling  at  the  moment,  would  be  reduced 
to  9  d.     Since  such  a  price  was  not  compatible  with  the 
prevailing  cost  of  wheat,  the  Government  proposed  itself 
to  pay  the  difference  between  the  cost  and  the  selling 
price  of  bread.     There  should,  in  short,  be  a  subsidized 
loaf.     To  effect  this  all  flour  from  the  mills,  which  were 
already   under    government    control,    would   be    sold   to 
bakers  at  such  a  price  as  would  enable  them  to  put  on 
the   market   a   9  d.    loaf.     The   difference   between   the 
amount  realized  by  millers  from  their  sale  of  flour  and 
the  price  which  they  would  have  to  pay  for  British  wheat 
or  which  the  Government  would  have  to  pay  for  imported 
w^heat  would  be  met  by  a  subsidy  from  the  Exchequer ^^ 
Mr.  McKenna,  taking  up  the  subject,  estimated  this  dif- 
ference at  some  £38  millions  per  year,  if  wheat  remained 
at  recent  prices.     The  loaf  at  9  d.  represents  wheat  at 
60s.  per  quarter,  whereas  the  maximum  price  paid  to 
farmers  at  the  time  was  78  s.     The  difference,  in  short, 

81  Ibid.,  Jy.  26,  p.  8. 


246 


WAR    TIME    CONTROL    OF    INDUSTRY 


would  be  the  equivalent  of  the  yield  of  a  shilling  income 
tax.^2  jj-  ^35  ^  iQj^g  g^gp  jj^  socialistic  policy.  For  the 
state  assumed  the  responsibility  of  furnishing  to  all  its 
people  bread  not  merely  at  cost  but  below  cost.  The  ef- 
fects, too,  were  to  be  far  reaching.  Apart  from  the  new 
item  which  was  added  to  the  budget,  the  consumption  of 
bread  was  bound  eventually  to  increase,  and  consideration 
has  already  been  given  to  new  measures  necessitated 
thereby. 

Because  of  the  institution  of  the  subsidized  loaf  the 
fixing  of  new  maximum  prices  for  home-grown  cereals 
in  August  did  not  have  the  importance  which  similar  ac- 
tion had  had  in  April.  So  far  as  wheat  was  concerned, 
the  prices  indicated  what  the  Government  would  have  to 
pay  the  growers,  not  what  the  consumer  would  eventually 
pay.  The  new  prices  for  wheat  and  rye  ranged  from 
y^i  s-  6  d.  per  quarter  in  the  autumn  of  1917  to  yj  s.  9  d. 
in  and  after  June,  1918.^^  Until  June,  therefore,  the  cost 
of  subsidized  bread  to  the  Government  would  be  some- 
what less  than  Mr.  McKenna  had  computed,  afterward 
quite  as  much,  assuming  always  that  imported  wheat 
could  be  procured  at  about  78  s.  Since  the  schedule  of 
maximum  prices  has  greater  significance  for  the  producer 
of  cereals  than  for  the  consumer  of  bread,  it  will  demand 
further  consideration  relative  to  its  effects  upon  agricul- 
ture. 

Not  the  least  among  the  innovations  of  the  new  Food 

82  Ibid.,  Jy.  25,  p.  10. 
*3  Ibid.,  Aug.  16,  p.  3. 


ji'Wj-^  SWtOftW 


FOOD 


247 


Controller  was   his  enlistment  of  local  support  in  the 
guise  of  Food  Control  Committees.     The  responsibility 
of  these  bodies  for  the  distribution  of  sugar  by  means  of 
the  card  register  scheme  has  been  described.     At  the  end 
of  August  their  appointment  and  constitution  was  pre- 
scribed, the  order  not  being  applicable  to  Ireland.     Local 
authorities  were  asked  to  appoint  to  each  committee  not 
more  than  twelve  persons.     No  restrictions  upon  choice 
were  imposed  save  that  one  member  must  be  a  woman 
and  one  a  representative  of  labour.     As  appointments 
throughout  Great  Britain  began  to  be  reported  during 
September,  it  appeared  that  local  bodies  often  chose  as 
members  representatives  of  the  food-distributing  trades. 
Protest  often  arose  in  such  cases  and  there  seemed  to  be 
danger  that  public  confidence  in  the  new  Committees 
might    not    be    so    complete    as    was    desirable.     Lord 
Rhondda  thereupon  urged  that  appointments  be  repre- 
sentative of  all  classes  of  consumers  and  that,  wherever  a 
co-operative  society  existed,  at  least  one  representative  of 
it  be  nominated.     In  one  case  where  the  local  authority 
had  chosen  a  preponderance  of  traders  he  asked  for  a  re- 
vision of  membership.^*     Gradually  more  satisfactory  re- 
ports began  to  come  in  and  the  Local  Food  Control  Com- 
mittees seemed  fairly  launched  upon  their  careers.     No 
one  could  underestimate  their  importance.     In  their  hands 
lay  the  immediate  administration  of  all  that  had  thus  far 
been  attempted  in  food  control.     To  secure  economies  of 
consumption  through  subsidiary  Food  Economy  Commit- 

8*  Ibid.,  Aug.  27,  p.  3;  Aug.  28,  p.  3;  Sept.  i,  p.  8. 


r-^>*tii;*aBiti,..ii*KS»«.**™  '""'jM!    ■ 


248 


WAR    TIME   CONTROL   OF    INDUSTRY 


tees  was  their  task ;  to  administer  the  one  rationing  scheme 
already  determined  upon,  that  for  sugar,  was  their  duty; 
to  supervise  the  observance  of  maximum  prices  and  to 
determine  these  prices  more  precisely  in  certain  com- 
modities was  their  responsibility.  Local  self-government 
by  representatives  of  the  community  was  an  old  English 
tradition,  and  Lord  Rhondda  showed  insight  in  making 

it  one  of  the  decisive  factors  in  his  difficult  undertak- 
ing. 


1 


AGRICULTURE 

The  problem  of  the  food  supply,  as  considered  in  the 
preceding  chapter,  has  reference  either  to  economy  of 
consumption  or  to  the  protection  of  the  consumer  against 
high  prices.  The  latter  aspect  of  it  has  in  turn  revealed 
another  phase  of  the  situation.  That  prices  may  be  kept 
moderate,  the  maintenance  and  even  the  increase  of  pro- 
duction appears  to  be  indispensable.  Early  in  the  war 
the  Government  saw  this  clearly  and  on  June  17,  1915, 
appointed  a  committee  to  report  on  the  subject.  The 
committee  was  instructed  to  suggest  steps  which,  on  the 
assumption  that  the  war  would  be  prolonged  beyond  the 
harvest  of  19 16,  might  be  taken  to  maintain  and  increase 
by  legislation  or  otherwise  the  production  of  food  in 
England  and  Wales.^  Lord  Milner  became  chairman  of 
the  Committee  and  its  two  reports  made  in  July  and 
October  of  191 5  admirably  describe  the  condition  of 
agriculture  and  outline  measures  looking  towards  its  im- 
provement.2  They  are  fundamental  for  an  understand- 
ing of  what  was  finally  done. 

Since  the  fall  in  the  prices  of  cereals  in  the  later  seven- 
ties, the  Committee  pointed  out,  some  four  million  acres 
of  arable  land  in  England  and  Wales  have  been  converted 
to  pasture.     It  might  have  added,  as  Mr.  Lloyd  George 


1 B.  T.  J.,  Je.  24,  1915. 
2  Cd.  8048,  8095. 


249 


,iifW*-'Wlr-te»        •^'*'  I      '■?«.' 


250 


WAR   TIME   CONTROL   OF   INDUSTRY 


did  later  that  twenty  years  after  the  Corn  Laws  were 
abolished  in  1846,  twice  as  much  wheat  was  still  produced 
as  was  imported.  Today,  on  the  other  hand,  from  70 
to  80  per  cent,  of  the  cereal  supply  is  got  from  abroad 
and  the  area  under  wheat  has  fallen  to  less  than  two  mil- 
lion acres.  Of  the  27,000,000  acres  of  agricultural  land 
in  England  and  Wales,  16,000,000  acres  are  in  pasture, 
only  11,000,000  acres  in  tillage.^  In  view  of  this 
situation,  the  Committee  recommended  that  farmers 
be  induced  to  plough  up  much  of  the  land  laid  to  grass 
since  the  seventies.  Thereby  not  only  would  the  grain- 
producing  capacity  of  the  nation  be  increased  but  its 
capacity  to  produce  meat  and  milk  would  in  some  districts 
be  almost  doubled.  Each  additional  million  acres  under 
wheat  would  mean  from  four  to  five  million  quarters 
grown  at  home  or  fully  six  weeks'  supply  for  the  entire 
United  Kingdom.^ 

If  farmers  were  to  embark  upon  such  an  undertaking, 
they  would  need  persuasion.  To  induce  them  to  sacrifice 
the  comparative  security  of  their  present  profits,  to 
change  methods  and  alter  rotations,  to  increase  their 
arable  in  the  face  of  a  shortage  of  labour,  to  run  the  risk 
of  uncertain  seasons  and  a  fall  in  the  price  of  wheat  at 
the  end  of  the  war,  the  state  should  guarantee  a  minimum 

3L.  T.,  Je.  28,  1917,  p.  10.  Of  the  11  million  acres  in  tillage  in 
1916,  about  2  millions  were  in  wheat,  i^  millions  in  barley,  2  mil- 
lions in  oats,  i  million  in  turnips,  i  million  in  peas,  beans,  potatoes, 
and  mangold,  while  the  remainder  was  in  clover  and  other  rotation 
grasses. 

*  Cd.  8045. 


AGRICULTURE 


251 


price  for  home-grown  wheat  for  a  period  of  years.  The 
Committee  was  unanimous  in  its  recommendation  that 
45  s.  a  quarter  ought  to  be  assured  to  growers  for  four 
years. 

There  was  danger,  of  course,  that  not  much  wheat 
might  be  got,  while  the  Government  might  yet  find  itself 
pledged  to  heavy  payments  after  the  war.  It  had,  there- 
fore, been  suggested  to  the  Committee  that  the  price  be 
guaranteed  only  on  increased  output.  Such  a  measure  the 
Committee  feared  would  not  work  in  practice  and  thought 
more  feasible  another  proposal  to  limit  the  Government's 
liability.  This  second  plan  would  restrict  the  state's 
guarantee  to  those  farmers  who  might  increase  their 
arable  by  at  least  one-fifth  over  the  19 13  area  and  to  those 
who  had  at  least  one-fifth  of  all  their  arable  and  grass 
land  under  wheat.  Some  members  of  the  Committee 
were  of  the  opinion  further  that  no  farmer  should  have 
the  benefit  of  a  guaranteed  price  unless  he  could  show 
that  he  was  paying  a  fair  rate  of  wages  to  his  labourers. 
The  Committee  as  a  whole,  however,  feared  that  such  a 
proviso  might  defeat  the  main  purpose  of  the  measure 
and  was  not  convinced  that  it  was  as  yet  necessary  to 
apply  compulsion  to  insure  a  rise  of  wages.  Wages 
ought  to  rise  automatically  as  a  result  of  the  scheme  and 
of  the  demand  for  labour.  Meanwhile  an  inquiry  into 
the  agricultural  wages  paid  throughout  the  country  might 
well  be  instituted  to  serve  as  a  basis  for  legislation,  if 
legislation  should  prove  necessary.^ 

5  Ibid. 


i>,«»*l>««W>JW8b<i!*B*»a*?S 


252 


WAR    TIME    CONTROL   OF   INDUSTRY 


Shortly  after  the  Committee  made  its  report  the  food 
situation  so  changed  that  the  Government  did  not  feel 
called  upon  to  adopt  the  new  proposals.  The  submarine 
seemed  to  be  under  control,  immediate  shortage  of  the 
food  supply  was  averted,  cattle  and  sheep  were  abun- 
dant, the  area  under  wheat  had,  owing  to  high  prices,  in- 
creased by  one-half  a  million  acres,  and  large  crops  were 
reported  from  Canada  and  Australia.  The  dearth  of  la- 
bour and  the  need  of  finding  men  for  the  army  also  re- 
strained the  Government's  hand.® 

The  recommendations  of  the  Committee's  second  re- 
port in  October,  accordingly,  looked  to  increasing  pro- 
duction without  the  stimulus  which  would  have  been  de- 
rived from  a  minimum  price  for  wheat.  Arable  farm- 
ing, the  Committee  was  informed,  had  been  remunera- 
tive on  all  but  the  wettest  and  heaviest  soils  for  some 
years  before  the  war.  More  profitable  it  would  become 
by  the  adoption  of  new  machinery  and  methods,  and  to 
such  adoption  the  state  might,  under  the  circumstances, 
well  contribute.  Of  fertilizers,  England  produces  large 
quantities  of  sulphate  of  ammonia,  much  of  it  exported. 
The  Government  should  arrange  with  producers  to  fur- 
nish a  sufficient  home  supply  of  it  at  nearly  pre-war 
prices  and  should  impress  upon  farmers  its  value.  Meas- 
ures should  be  taken  to  have  other  fertilizers,  nitrate  of 
soda  and  phosphate  rock,  imported  from  Chile,  and  from 
Florida  and  Tennessee.  New  feeding  stuffs,  made  from 
palm  nuts,  cocoanuts,  and  earth  nuts,  should  be  recom- 

6  A.  R.,  1915,  pp.  152,  153. 


I 


AGRICULTURE 


253 


mended  and  the  manufacture  of  oil-cake  should  be  ex- 
tended. Inasmuch  as  agricultural  tractors  and  ploughs 
were  essential  in  view  of  the  shortage  of  labour,  the  Gov- 
ernment might  well  permit  manufacturers  to  retain  their 
mechanics  and  might  well  declare  the  making  of  such 
implements  on  a  par  with  Government  contracts.  The 
labour  of  women  should  be  organized  and  directed  to  the 
farms.  Economical  and  valuable  was  the  raising  of  pigs, 
since  they  eat  food  otherwise  largely  wasted  and  pro- 
vide the  meat  most  widely  consumed  by  the  working 
classes.  Plots  of  unused  land  near  towns  and  villages 
should  be  utilized.  Most  immediately  effective,  perhaps, 
of  all  the  Committee's  recommendations  was  its  proposing 
the  appointment  of  local  War  Agricultural  Committees.'^ 
Such  bodies  w^ere  soon  instituted  to  urge  upon  the  far- 
mer the  adoption  of  the  improvements  in  question,  and 
a  year  later  Mr.  Prothero  complimented  them  on  their 
admirable  work. 

A  year  later,  as  it  happened,  the  agricultural  situation 
had  become  much  more  serious  than  it  was  when  Lord 
Milner's  Committee  made  its  second  report.  In  May, 
1 9 16,  Mr.  Prothero  declared  in  the  Commons  that  the 
production  of  food  in  the  country  was  likely  to  fall  off 
by  15  per  cent,  or  25  per  cent.  "  I  should  be  very  glad," 
he  added,  "  if  the  Government  would  grasp  this  situation 
firmly  and  put  us  upon  rations.  I  believe  that  sooner  or 
later  that  will  have  to  be  done."  One  cause  of  the  im- 
paired prospect  was  the  bad  weather  of  the  spring  of 

7  Cd.  8095. 


\ 


254 


WAR    TIME   CONTROL   OF   INDUSTRY 


191 6,  which  long  made  labour  on  the  land  impossible.^ 
By  autumn  further  causes  were  apparent  and  were  dis- 
closed in  the  debate  of  October  17.  The  area  under 
wheat  was  260,000  acres  smaller  than  in  19 15  and  the 
wheat  crop  stood  at  only  88>^  per  cent,  of  the  average 
crop  of  the  last  ten  years.  In  part  this  was  due  to  a 
diminished  yield  per  acre,  since  the  land  of  England  and 
Wales  was  tending  to  become  increasingly  foul.  In  the 
autumn  of  1916,  112,000  acres,  which  a  year  before  had 
been  under  farm  crops,  were  lying  fallow.  It  was  pre- 
dicted, too,  that  in  19 17  500,000  more  acres  would  cease 
to  be  under  wheat.  Should  this  happen,  the  loss  for  the 
two  years  would  be  some  two  million  quarters,  an 
amount  which  100  ships  of  5000  tons  would  require  four 
and  one-half  months  to  fetch  from  Australia.  And  be- 
hind all  this  was  the  fact  that  30  per  cent,  of  the  perma- 
nent agricultural  labour  had  left  the  land.®  By  way  of 
contrast  the  Marquis  of  Lincolnshire  pointed  out  in  the 
Lords  that,  with  worse  land  and  worse  weather,  the 
German  farmer  was  able  to  produce  50  per  cent,  more 
meat  and  corn  per  acre  than  the  British  farmer.^^ 

The  seriousness  of  the  situation  impelled  the  Govern- 
ment to  action  and  from  November,  191 6,  various  meas- 
ures, for  the  most  part  recommended  by  Lord  Milner's 
Committee,  were  put  into  effect.  Behind  them  was  the 
vigorous  hand  of  Mr.  Prothero,  the  new  Minister  of  Agri- 

8  p.  D.  C,  1916,  LXXXII,  1895. 
Mbid.,  LXXXVI,  451,454,  458. 
10  L.  T.,  Aug.  7,  1917,  p.  8. 


AGRICULTURE 


255 


culture,  a  former  member  of  the  Committee,  and  the 
author  of  a  history  of  British  farming.  The  Govern- 
ment's first  act  was  to  order  an  agricultural  census  of 
Great  Britain.  Crops,  live  stock,  the  residents  on  the 
farm,  casual  labourers,  male  employes  who  had  joined  the 
army,  all  were  to  be  reported.  ^^  Next  an  ideal  was  pro- 
posed. If  in  1872  England  and  Wales  had  tilled  some 
4,000,000  acres  more  of  arable  than  at  present,  why 
should  they  not  so  till  some  of  them  again?  Plans  look- 
ing toward  such  an  achievement  were  formulated.  Cer- 
tain measures  could  be  taken  before  spring  to  induce  the 
farmer  to  plough  liberally  in  19 17  and  during  the  year 
other  measures  to  foster  still  more  ploughing  during 
19 1 8.  In  the  main,  four  lines  of  action  were  proposed. 
Waste  lands  might  be  brought  under  tillage,  fertilizers 
and  improved  agricultural  machinery  might  be  made 
available  for  the  farmer,  the  number  of  farm  labourers 
might  be  increased  and  paid  a  suitable  wage,  and  a  mini- 
mum price  for  \/heat  over  a  period  of  years  might  be 
guaranteed. 

To  the  first  of  these  measures  the  Government  was 
urged  by  the  War  Emergency  Workers'  National  Com- 
mittee. In  November,  19 16,  the  Committee  proposed 
that  the  Government  take  into  its  own  hands  400,000 
acres  now  fallow  or  in  grass  and  provide  for  the  tillage 
of  them.  Capital,  it  added,  should  be  advanced  to  local 
authorities  and  to  co-operative  societies  to  induce  them 

"  D.  R.  M.,  3rd  ed.,  p.  357. 


256 


WAR    TIME    CONTROL   OF    INDUSTRY 


AGRICULTURE 


257 


to  bring  land  under  cultivation.^^     j^  ^^^  ^pj^.^^  ^^  ^^j^ 
appeal   the  Government   responded   on   December   5   by 
a  new  regulation  under  the  Defence  of  the  Realm  Act. 
This  provided  that  the  Board  of  Agriculture  and  Fish- 
eries might  enter  upon  land  without  any  one's  consent  if 
the  land  was  for  the  time  unoccupied  or  was  common 
land;  and  that  in  other  cases  it  might  so  enter  with  the 
consent  of  the  occupier  and  the  person  receiving  the  rent. 
Land  thus  taken  over  might  be  cultivated  either  by  a 
contract  of  tenancy  or  in  some  other  manner  and  the 
Board  might  authorize  any  local  authority  to  act  for  it. 
This  meant,  of  course,  that  local  authorities  might  ac- 
quire uncultivated  land  and  let  it  out  in  small  allotments 
and  market  gardens.     If  a  farmer  should  prove  recalci- 
trant about  the  cultivation  of  his  land,  the  Agricultural 
War  Committees  might  enter  upon  it  and  take  possession. 
The  regulation  was  an  endeavour  to  stimulate  produc- 
tion through  small  holdings. ^^ 

In  taking  the  next  step,  the  provision  of  fertilizers,  the 
Board  of  Agriculture  did  what  Lord  Milner's  committee 
had  recommended :  it  checked  the  exportation  of  sulphate 
of  ammonia.  Inasmuch  as  the  supply  of  feeding  stuffs 
like  oil-cake  was  bound  to  be  reduced,  farmyard  manure 
would  lose  half  of  its  ammonia.  In  1918  there  ought, 
therefore,  to  be  sold  five  times  as  much  sulphate  of  am- 
monia as  was  used  in  19 16  and  of  this  the  Board  had 
hope.     Supplies  of  lime  also  were  increased  and  a  native 

12  M.  G..  Dec.  2,  1916,  p.  8. 

13  B.  T.  J.,  Dec.  14,  1916,  p.  795. 


i 


form  of  phosphate  which  might   replace  the  German 
product  was  introduced  to  the  market.^* 

With  even  more  comprehensive  plans  the  Board  of 
Agriculture  turned  to  the  provision  of  improved  agricul- 
tural machinery.  To  co-operate  with  it  and  with  the 
Food  Controller,  the  Ministry  of  Munitions  in  January 
set  up  an  Agricultural  Machinery  Branch.  Agricultural 
machinery  and  implements  were  henceforth  to  be  classed 
as  munitions  work  and,  in  order  to  control  the  character 
of  those  manufactured,  no  one  might  henceforth  make 
them  except  under  permit.^^  For  the  same  reason  the 
importation  of  them  without  licence  was  prohibited,  the 
Government  wishing  to  ensure  that  the  machinery  be  of 
the  right  type  and  be  distributed  over  the  country  where 
most  needed.  ^^  By  February,  thirty-two  motor  tractors 
had  been  acquired  by  the  Board  of  Agriculture  and  230 
more  had  been  ordered.^^  Mr.  Lloyd  George,  speaking 
in  May,  warned  workmen  that  disaster  might  be  brought 
upon  the  country  by  any  refusal  on  their  part  to  use  these 
labour-saving  machines. ^^  At  the  same  time  the  Board 
of  Agriculture  requested  the  Ministry  of  Munitions  to 
supply  it  with  6000  tractors.  A  type  was  selected  and 
engineering  firms  were  asked  to  tender  bids  for  the  mak- 
ing of  the  whole  or  of  parts.  So  great  were  the  de- 
mands upon  the  Ministry  of  Munitions  for  war  material, 

1*  L.  T.,  Oct.  6,  1917,  p.  8. 

16  D.  R.  M.,  3rd  ed.,  p.  179;  L.  T.,  Jan.  10,  1917,  P-  5- 

16  B.  T.  J.,  Mar.  i,  1917,  p.  606. 

17  L.  T.,  Feb.  9,  1917. 

18  M.  G.,  May  28,  1917,  p.  6. 


ii^-M.  i■s^^'^^  ^^      i^nwV'S^'? 


258  WAR   TIME    CONTROL   OF   INDUSTRY 

however,  that  the  undertaking  had  to  be  adandoned.  A 
considerable  number  of  American  tractors  of  approved 
type  were  purchased  instead,  and  the  entire  output  of 
British-built  tractors  was  absorbed. ^^ 

If  2,000,000  acres  were  to  be  added  in  191 8  to  the  ex- 
isting arable  it  was  estimated  that  at  least  5000  tractors 
would  be  needed.  In  August,  191 7,  as  many  as  9000 
had  been  ordered  and  1000  of  them  had  been  received 
from  the  manufacturers.  It  was  hoped  that  by  October 
2500  would  be  on  hand,  by  the  end  of  December  4500, 
and  by  the  end  of  March  the  entire  9000.  Of  the  num- 
ber, 6000  had  been  ordered  from  the  Ford  Company, 
2000  from  other  American  firms,  and  1000  from  British 
manufacturers.  The  Royal  Agricultural  Society  had 
recommended  the  Ford  after  a  trial  by  five  judges.  It 
was  light  for  its  power,  hence  was  light  on  the  land,  was 
easily  handled,  and  was  able  to  turn  in  a  small  circle. 
Since  the  Fords  could  not  be  made  in  England  as  had  been 
at  first  planned,  the  parts  were  to  be  made  in  the  United 
States  and  assembled  after  being  sent  over.^^  In  its 
furnishing  of  tractors  the  Government  did  not  intend  to 
relieve  farmers  of  ploughing  and  of  other  work  which 
they  could  do  themselves.  Farmers  who  could  were 
urged  to  buy  tractors;  but  to  those  who  could  not,  the 
War  Agricultural  Committees,  would,  as  far  as  possible, 
furnish  assistance.^^  The  loan  of  expensive  agricultural 
machinery  w^as  thus  a  new  burden  assumed  by  the  state. 

i»B.  T.  J.,  Je.  I,  T917,  P-  203;  L.  T.,  Jy.  25,  1917,  p.  8. 

20  L.  T.,  Aug.  24,  1917,  p.  3. 

21  Ibid.,  Aug.  2,  p.  3. 


AGRICULTURE 


259 


The  extended  use  of  agricultural  machinery  was  ex- 
pected to  repair  in  part  the  30  per  cent,  depletion  of  agri- 
cultural labour.  Efforts  were  also  made  to  retain  such 
labourers  as  remained  and  to  increase  the  number  of 
hands  from  other  sources.  Among  possible  sources  of 
supply  were  German  prisoners.  In  November,  19 16, 
Parliament  was  informed  that  a  scheme  was  in  prepara- 
tion whereby  small  parties  of  prisoners  would  be  turned 
over  to  farmers,  who  in  turn  would  be  responsible  for 
their  custody,  housing,  and  feeding.  At  the  beginning 
of  the  new  year  Mr.  Prothero  announced  that  10,000 
prisoners  skilled  in  agricultural  labour  would  be  available 
and  would  be  employed  under  the  supervision  of  the 
county  War  Agricultural  Committees.^^  Owing  to  the 
attitude  of  the  prisoners  themselves,  however,  not  very 
much  came  of  the  project. 

Women  were  another  resource.  In  June,  191 7,  the 
President  of  the  Board  of  Agriculture  issued  an  appeal 
to  farmers  to  employ  them  more  extensively  on  the  land. 
They  were  to  be  looked  upon  not  as  substitutes  for  men 
already  employed  but  as  additional  workers,  and  no 
farmer  would  risk  the  loss  of  his  male  labour  if  he 
utilized  their  services.  They  were  willing  and  able  to 
work ;  and  they  had  already  shown  themselves  useful  in 
the  care  of  stock,  in  milking,  in  the  management  of 
horses,  in  all  odd  jobs  about  the  farm  and  in  such  ordi- 
nary field  work  as  weeding  and  hoeing.  Early  in  the 
year  Mr.  Prothero  had  expressed  himself  as  hopeful  of 

22  A.  R.,  1916,  p.  189;  L.  T.,  Jan.  2,  1917- 


26o 


WAR    TIME    CONTROL    OF    INDUSTRY 


securing  the  services  of  50,000  or  60,000  women,  the 
equivalent  of  35,000  men.^^  In  June  Lord  Milner 
told  the  Lords  that  120,000  women  were  working 
on   farms  and  that  some  20,000  more  might  soon  do 


so. 


24 


More  difficult  was  the  retention  of  male  labour  on  the 
farm.  Better  wages  could  be  had  elsewhere,  and  the 
War  Office  was  only  too  ready  to  enlist  agricultural  la- 
bourers. How  unwise  were  some  of  the  dispositions  of 
this  body  is  illustrated  by  an  instance  described  in  Parlia- 
ment. A  noble  peer  explained  that  his  second  gardener, 
a  man  not  unskilled  in  agriculture,  had  been  enlisted  and 
that  the  man's  wife  and  eight  children  had  become  re- 
cipients of  an  allowance  amounting  to  35  s.  weekly. 
Meanwhile  the  gardener  had  for  two  years  been  em- 
ployed, not  at  the  front,  but  as  an  officer's  groom  some- 
where in  Essex.^^  Further  evidence  of  lack  of  co-ordi- 
nation between  the  departments  of  War  and  Agriculture 
was  abundant.  When  the  latter  told  farmers  to  pool 
their  labour,  the  former  asked,  ''  How  can  this  man  be 
indispensable  to  Farmer  A  when  he  has  been  lent  to 
Farmer  B  ?  "  On  the  other  hand,  the  County  Councils, 
those  large  landlords  of  small  holdings,  were  not  able 
to  co-ordinate  labour.  If  100  acres  in  small  holdings 
were  cultivated  by  ten  men,  each  could  say  to  the  War 
Office  that  he  was  indispensable  to  the  cultivation  of 

23  M.  G.,  Je.  1917,  p.  4;  L.  T.,  Feb.  9. 

2*L.  T.,  Je.  28,  1917,  p.  10. 

25  P.  D.  C,  1916,  LXXXVI,  460. 


AGRICULTURE 


261 


his  holding,  yet  the  County  Council  could  till  the   100 
acres  with  three  men  and  release  seven.^^ 

In  19 1 7  some  approach  was  made  to  better  co-ordina- 
tion.    An  agreement  was  reached  between  the  two  de- 
partments whereby  the  new  army  order  should  withdraw 
not  more  than  30,000  men  from  the  land.     In  May,  to  be 
sure,  there  was  complaint  that  the  War  Office  was  not 
keeping  its  agreement,^^  but  in  the  same  month  it  did  at 
least  assist  agriculture  in  another  way.     Soldiers  not  in 
Class  A  were  given  furloughs  to  assist  in  sheep-shearing. 
Elsewhere  training  schools  were  set  up  to  teach  soldiers 
the  management  of  horses  and  the  technique  of  plough- 
ing.28     In  June  Lord  Milner  stated  that  from  one  source 
or  another  the  Government  had  secured  some  70,000  men 
for  farm  work.^^     In  July  it  was  announced  that  the 
County   Agricultural    Executive   Committees   would   be 
given  some  influence  in  retaining  men  on  the  land.     If 
any  Committee  should  issue  a  voucher  that  a  man  was 
employed  full  time  in  farm  work  and  was  so  engaged  on 
June  I,  19 1 7,  and  further  that  the  work  was  of  national 
importance,  the  man  would  not  be  called  up  for  the  army. 
The  Committees  were  to  see  to  it,  moreover,  that  agri- 
cultural labour  was  put  to  the  best  use  and  that  any  sur- 
plus on  a  farm  would  be  moved  to  some  other  place  where 
it  was  urgently  required.^^     Such  measures  tended  to 

2«  P.  D.  C,  1916,  LXXXVII,  878. 

27  M.  G.,  May  30,  Je.  7,  I9i7- 

28  L.  T.,  Oct.  6,  1917,  p.  8. 

29  Ibid.,  Je.  28,  p.  10. 

30  Ibid.,  Jy.  25,  p.  3. 


262 


WAR    TIME    CONTROL   OF    INDUSTRY 


allay  the  farmer's  distrust  of  the  War  Office  and  to  re- 
lieve somewhat  his  anxiety  regarding  labour. 

The  policy  of  largest  scope,  however,  looking  toward 
the  encouragement  of  agriculture,  was  the  guaranteeing 
to  the  farmer  of  minimum  prices  for  grain  and  to  the 
agricultural  labourer  of  a  minimum  wage.  Minimum 
prices  for  grain  had,  it  will  be  remembered,  been  recom- 
mended by  Lord  Milner's  Commitee,  and  the  decision  of 
the  Government  at  length  to  adopt  this  recommendation 
was  announced  by  Mr.  Lloyd  George  in  the  Commons  on 
February  23,  1917.  A  schedule  of  prices  for  six  years 
was  presented,  a  proviso  being  added  that  the  matter  was 
open  to  reconsideration  after  four  years.  As  compared 
with  the  pre-war  price  of  wheat,  which  was  34  s.  11  d.  the 
quarter,  and  the  prices  of  191 5  and  19 16,  which  were 
respectively  52  s.  10  d.  and  58  s.  5  d.,  the  new  minimum 
prices  for  wheat,  it  was  proposed,  should  be  60  s.  in  19 17, 
55  s.  in  1918  and  1919,  45  s.  in  1920,  1921,  and  1922. 
The  corresponding  prices  for  oats  during  the  six  years 
were  to  be  38^^  s.,  2i^  s.  and  24  s.  For  potatoes  in  19 17, 
£6  a  ton  should  be  guaranteed.  After  explaining  that 
some  four  million  acres  had  been  converted  from  arable 
to  grass  since  the  sixties,  the  Premier  stated  that  the 
farmer  was  hesitant,  not  so  much  through  lack  of  labour, 
as  through  timidity.  Twice  since  the  process  of  conver- 
sion began  he  had  been  caught  badly  with  too  much 
arable  —  in  1880  and  in  1890.  That  a  fear  of  the  re- 
currence of  such  disaster  might  not  affect  him  now,  the 
Government  was  drafting  a  bill  along  the  lines  indicated. 


AGRICULTURE 


263 


Provision  for  a  minimum  wage  of  25  s.  a  week  for  agri- 
cultural labourers  would  be  included.^^  It  was  hoped 
that  as  a  result  some  three  million  more  acres  might  be 
brought  under  cereals  and  potatoes.^^ 

On  April  1 1  the  new  measure,  known  as  the  Com  Pro- 
duction Bill,  was  introduced.33     At  once  the  question 
which  had  confronted  Lord  Milner's  Committee  again 
arose.     Should  the  guarantee  extend  to  all  grain  raised, 
or  merely  to  the  added  product?     If  to  the  former,  the 
Government  might  find  itself  bound  to  make  consider- 
able payments,  although  output  might  thereby  be  little  in- 
creased.    If  to  the  latter,  the  farmer  might  not  main- 
tain existing  production.     Mr.  Prothero  declared  that  the 
second  risk  was  more  serious  and  that  the  Government 
was  not  willing  to  confine  the  bonus  merely  to  excess  pro- 
duction.    Another  question  which  came  up  for  discussion 
was  whether  the  output  in  quarters  or  the  acreage  under 
cereals  should  be  made  the  basis  of  the  guaranteed  pay- 
ments.    To  give  the  measure  a  wider  and  more  demo- 
cratic   appeal    the    acreage    basis    was    adopted.     As 
amended,    the    bill    provides    that    payments,    whenever 
called  for,  will  be  based  upon  every  acre  cultivated  and 
producing  a  crop  of  wheat  or  of  oats.^^ 

Most  hotly  debated  of  the  provisions  of  the  bill  was 
that  relative  to  the  minimum  wage  for  agricultural  la- 
bourers —  an  inducement  to  keep  them  on  the  land  and 

31  Ibid.,  Feb.  24,  p.  9. 

32  M.  G.,  Je.  7,  1917. 

33  L.  T.,  Apr.  12,  1917,  p.  3. 
8*  Ibid.,  Jy.  II,  p.  10;  Jy.  12. 


264 


WAR    TIME    CONTROL    OF    INDUSTRY 


a  means  of  enabling  them  to  meet  the  increased  cost  of 
Hving.  The  Premier  in  February  had  promised  25  s.  a 
week.  Before  the  war  he  had  started  a  campaign  to 
secure  20  s.,  the  average  pre-war  wage  being  17  s.  10  d. 
RecalHng  the  latter  facts  and  pointing  out  that  the  figures 
of  the  Board  of  Trade  showed  an  advance  of  75  per  cent, 
in  the  cost  of  living,  the  Labour  members  demanded  that 
the  minimum  be  fixed  at  30  s.  The  Government,  how- 
ever, stood  firm.  It  maintained  that  the  25  s.  minimum 
would  mean  in  many  districts  an  acceptable  advance  over 
prevailing  rates,  that  this  sum  could  be  increased  where 
desirable  by  Wages  Boards  for  which  the  bill  provided, 
that  the  25  s.  would  continue  after  the  war  and  was  in- 
dependent of  a  fall  of  prices,  and  that,  should  a  fall  to 
pre-war  levels  take  place  in  the  price  of  wheat  during 
five  years,  the  farmer  would  get  from  the  state  only  £68 
millions  but  would  have  to  pay  in  wages  £59  millions 
above  pre-war  wages.  Should  the  minimum  wage  be 
fixed  at  30  s.  the  latter  payment  would  be  increased  to 
£100  millions.  Such  a  provision  would  take  from  the 
bill  its  effective  force  as  a  stimulus  to  production  and 
upon  the  Premier's  February  promise  the  Government 
would  stand  or  fall.  It  would  gladly  fix  no  minimum 
whatever,  as  in  the  case  of  the  miners,  but  agricultural 
labour  was  unorganized  and  helpless.^^ 

Thus  defended,  the  Bill  was  passed  on  August  21  and 
five  weeks  later  an  Agricultural  Wages  Board  was  set 
up.     Upon  it  sat  sixteen  representatives  of  employers 


»5  Ibid.,  Jy.  24,  p.  10. 


AGRICULTURE 


265 


and  sixteen  representatives  of  workmen,  together  with 
seven  impartial  appointees  of  the  Board  of  Agriculture. 
Similarly  constituted  local  wages  committees  might  be 
established  by  the  Central  Board,  their  chief  duty  being 
to  recommend  wages  applicable  in  their  districts.^^     In 
determining  minimum  wages  the  Board  was  instructed 
by  the  President  of  the  Board  of  Agriculture  to  have  in 
mind  an  amount  which  would  enable  a  man  to  keep  him- 
self efficient  and  maintain  his   family  *'  in  accordance 
with  such  standard  of  comfort  as  may  be  reasonable  in 
relation  to  the  nature  of  his  occupation."  ^'^     It  was  a 
statement  that  would  many  times  have  to  be  interpreted. 
While  the  Government  was  carrying  out  its  policy  of 
encouraging  agriculture  by  guaranteeing  minimum  wages 
for  an  indefinite  time  and  minimum  prices  of  grain  for  a 
period  of  years,  it  displeased  the  farmer  by  its  action  in  a 
closely  related  matter.     In  August,   19 17,  the  scale  of 
maximum  prices  for  grain,  set  up  in  the  spring  to  pro- 
tect the  consumer,  was  revised.     So  far  as  wheat  was 
concerned,  the  new  scale  would  no  longer  affect  the  con- 
sumer.    Since  bread  was  henceforth  to  be  supplied  at 
the  uniform  price  of  9  d.  the  quartern  loaf,  a  price  cor- 
responding with  one  of  60  s.  the  quarter  for  wheat,  the 
maximum  price  to  be  set  for  wheat  reflected  only  what 
the  Government  would  in  the  future  have  to  pay  as  its 
subsidy  for  bread  so  far  as  this  was  made  from  home- 
grown wheat.^^     To  the  farmer  the  new  scale  seemed 

36  Ibid.,  Sept.  29,  p.  7;  Sept.  IS,  p.  3- 

37  Ibid.,  Aug.  7,  p.  8. 
88  Cf .  above. 


266 


WAR   TIME   CONTROL  OF   INDUSTRY 


illiberal.  Not  only  were  the  spring  maximum  prices  re- 
duced, but  the  weight  of  the  quarter  was  increased.  In- 
stead of  the  spring  maximum  of  78  s.  a  quarter  for 
wheat,  the  nominal  maximum  until  December  i  now  be- 
came ']'})  s-  6d.  and  the  real  maximum  (allowing  for  the 
increased  size  of  the  quarter)  72  s.  The  maximum  for 
oats  was  correspondingly  reduced  from  55  s.  nominally 
to  44  s.  3d.,  actually  to  43  s.,  the  maximum  for  barley 
from  65  s.  nominally  to  (^2  s.  9  d.,  actually  to  56  s. 

Provision  was  made,  to  be  sure,  for  a  progressive  in- 
crease in  prices  during  the  next  six  months,  except  in  the 
case  of  barley.  On  and  after  June  i  wheat  would  at 
length  command  yj  s.  9  d.  and  oats  48  s.  The  price  of 
wheat  in  the  summer  of  19 18,  therefore,  was  to  be  prac- 
tically what  it  had  been  in  the  summer  of  191 7.  But 
farmers  grumbled  about  the  reduction  during  the  later 
months  of  1917  and  the  earlier  months  of  1918.  When 
the  crops  of  191 7  were  sown,  they  said,  no  intimation  had 
been  given  that  market  prices  would  not  prevail ;  there 
was  being  transferred  to  the  consumer  most  of  the  ad- 
vantages arising  from  their  redoubled  efforts ;  the  success 
of  the  Corn  Production  Bill  was  being  compromised  by 
a  loss  of  confidence  in  the  Government.^^  More  astute 
observers  saw  in  the  new  prices  an  endeavour  to  make 
them  reflect  the  seasonal  abundance  of  autumn  and  winter 
compared  with  the  scantier  supplies  of  spring  and  early 
summer.  Looked  at  impartially,  they  were  high  in  com- 
parison with  pre-war  prices  and  even  in  comparison  with 

3»L.  T.,  Aug.  16,  1917,  p.  3;  Aug.  20,  p.  3. 


AGRICULTURE  267 

the  minimum  prices  of  the  Corn  Production  Bill.  Com- 
plaint, however,  was  not  likely  to  be  long  continued  nor 
was  the  success  of  the  new  measure  likely  to  be  seri- 
ously imperilled. 

By  the  autumn  of  1917  the  Government  could  review 
the  agricultural  achievements  of  the  year  and  state  ac- 
curately its  program  for  1918.     Whereas  at  the  end  of 
1916  the  arable  under  cultivation  in  England  and  Wales 
was  260,000  acres  less  than  in  191 5,  the  spring  sowing 
of  1917  had  restored  the  situation  and  had  improved  it 
by  the  addition  of  380,000  acres.     To  these  640,000  acres 
should  be  added  a  considerable  acreage  in  Scotland  and 
700,000  acres  in  Ireland.^^     In  view  of  the  unexpected 
increase  in  Ireland,  the  Government  could  afford  to  re- 
duce its  program  for  England  and  Wales.     The  3,000,- 
000  acres  at  first  asked  for  in   19 18  were  changed  to 
2,600,000,   of   which   some   380,000   had   already  been 
ploughed.^ ^     Not  all  of  the  remaining  amount  need  be 
got,  Mr.  Prothero  pointed  out,  by  ploughing  up  pastures. 
A  part  could  come  from  bare  fallow,  of  which  there  was 
still  350,000  acres,  a  part  from  the  2,500,000  acres  under 
clover  and  rotation  grasses,  a  part  by  taking  two  crops 
in  succession,  if  the  land  could  be  kept  clean.     Not  more 
than  2,000,000  acres  of  grass  land  would  have  to  be 
ploughed.     To  effect  the  ploughing  of  this  amount  fa- 
cilities in  the  shape  of  tractors  had  been  provided  or 
would  be ;  government  credit  for  the  purchase  of  seeds, 

<o  Ibid.,  Oct.  12,  p.  4. 

-»!  Ibid.,  Aug.  6,  p.  3 ;  Aug.  24,  p.  3. 


268 


WAR    TIME    CONTROL    OF    INDUSTRY 


fertilizers,  implements,  and  horses  would  be  extended; 
horses  and  ploughmen  would  be  lent  to  farmers  on  rea- 
sonable terms,  the  services  of  women  and  soldiers  would 
be  made  available.^^  Behind  these  immediate  methods  of 
assistance  were  the  guarantees  of  the  Corn  Production 
Bill.  The  outcome  would  for  the  rest  depend  upon  the 
patriotism  and  skill  of  the  British  farmer. 

*2  Ibid.,  Oct.  6,  p.  8. 


CONCLUSIONS  AND  COMPARISONS 

Broadly  speaking  the  state  may  be  said  to  exert  influ- 
ence upon  production,  distribution,  and  consumption  in 
three  ways.  It  may  persuade  the  producer,  distributor, 
or  consumer  to  enter  voluntarily  upon  some  course  of 
action  contributory  to  the  public  advantage.  So  per- 
suaded the  producer  may  put  his  product  on  the  market 
at  a  price  which  will  yield  him  only  a  moderate  return. 
The  consumer,  whether  the  state  itself  or  the  public,  will 
have  the  benefit  of  the  renunciation  of  profits  which  con- 
ditions of  scarcity  might  put  within  reach.  The  dis- 
tributor in  the  same  way  may  be  induced  to  renounce  the 
excess  charges  which  conditions  of  transportation  and 
distribution  might  warrant  his  asking.  The  consumer, 
again,  may  be  urged  to  economize  in  the  use  of  such  neces- 
sities as  coal  and  food.  Any  nation  which  in  time  of  war 
or  in  time  of  peace  can  bring  itself  to  a  state  of  efficiency 
by  measures  like  these  may  boast  of  a  population  ani- 
mated by  a  high  degree  of  public  spirit.  So  far  as  such 
methods  are  efficacious  they  are  obviously  wisest  and  are 
most  creditable  to  the  Government  and  people  concerned. 
Wherever  possible,  they  should  have  first  trial. 

The  state,  however,  failing  in  its  appeal  to  voluntary  ef- 
fort, may  find  it  necessary  to  resort  to  sterner  measures 

269 


,!,-ifes„J      "U— 


270 


WAR    TIME   CONTROL   OF    INDUSTRY 


CONCLUSIONS    AND    COMPARISONS 


271 


than  persuasion.     It  may  have  to  impose  regulations  upon 
the  processes  of  production,  distribution,  and  consump- 
tion.    Inasmuch  as  such  restraints  are  sometimes  neces- 
sary in  time  of  peace,  their  imposition  in  time  of  war 
would  not  be  unexpected  or  unwarranted.     They  tend 
usually  to  assume  the  form  of  making  obligatory  such 
action  as  would  preferably  be  induced  by  persuasion.    The 
producer  is  required  to  put  his  product  on  the  market  at 
a  fixed  maximum  price,  regardless  of  his  concurrence; 
the  distributor  is  restricted  in  what  he  may  charge  for 
his  services;  the  consumer,  although  not  rationed,  finds 
that  food  is  procurable  only  in  certain  quantities  depend- 
ant upon  the  quota  allowed  to  his  district  or  firm.     Regu- 
lations like  these  indicate  that  the  state  cannot  rely  upon 
voluntary  renunciation  but  hopes  that,  by  the  least  pos- 
sible interference  on  its  part,  satisfactory  conditions  may 
be  made  to  prevail. 

In  certain  cases  the  state  may  find  that  even  such  meas- 
ures are  inadequate.  At  this  juncture  it  steps  in  and  as- 
sumes entire  control.  While  the  immediate  administra- 
tion of  the  industry  in  question  may  be  left  with  the  own- 
ers, the  Government  henceforth  determines  all  larger  is- 
sues. It  fixes  the  wages  to  be  paid  the  workers,  it  ar- 
rives at  a  cost  price  by  an  investigation  of  the  costs  of  the 
successive  stages  of  production,  it  adds  to  this  the  profit 
which  is  deemed  just  for  the  producer,  and  it  specifies 
how  the  commodity  in  question  may  be  put  upon  the  mar- 
ket. Wholesalers'  and  retailers'  transactions  are  super- 
vised and  their  charges  closely  restricted.     In  this  way 


the  commodity  is  procurable  by  the  consumer  at  what  he 
may  properly  consider  the  cost  price.  The  consumer, 
although  the  ultimate  beneficiary  of  a  system  like  this, 
does  not  escape  its  compelling  power.  Economy  of  con- 
sumption may  be  enjoined  upon  him  and  a  system  of  ra- 
tioning, more  or  less  elaborate,  may  be  imposed.  Such 
imposition  occurs  only  when  the  supply  of  a  commodity 
is  considerably  below  the  normal  demand.  Then  it  is 
that  the  state  interposes  to  see  that  equal  sacrifices  are  ex- 
acted from  all  its  citizens. 

Naturally  a  country  is  likely  to  experience  transitions 
from  one  of  these  stages  of  state  interference  to  another 
as  the  conditions  of  war  grow  more  exacting.  The  tran- 
sitions, too,  are  more  rapid  in  the  case  of  certain  indus- 
tries than  in  the  case  of  others.  In  general  a  Govern- 
ment, plunged  into  war,  at  once  assumes  control  of  what- 
ever industries  it  feels  essential  to  the  prosecution  of  the 
war  or  the  maintenance  of  its  civil  population  in  war 
time.  Other  industries  it  leaves  free,  relying  if  need  be 
upon  persuasion  and  exhortation.  Only  when  induce- 
ments of  this  kind  are  disregarded  does  it  resort  to  regu- 
lation and  ultimately  to  control.  A  comparison  of  Eng- 
lish and  American  experience  in  these  matters  is  not  un- 
instructive. 

Striking  differences  in  the  situation  in  which  each 
nation  finds  itself  at  the  end  of  19 17  at  once  appear. 
One  country  has  been  at  war  for  more  than  three  years, 
the  other  for  less  than  three-fourths  of  a  year.  In  the 
one  case  a  vast  expenditure  of  resources,  a  large  part  of 


(■*!;"j,„*«ri«',   .^'."mi^ifn^''^ 


'1 


2^2 


WAR   TIME   CONTROL   OF   INDUSTRY 


CONCLUSIONS   AND   COMPARISONS 


273 


the  population  under  arms,  heavy  casualties,  and  the  long 
strain  of  steady  application  demanded  of  the  labouring 
classes  have  created  a  temper  very  different  from  that 
prevailing  in  a  country  which  until  recently  has  profited 
from  the  war  and  has  as  yet  felt  scarcely  any  of  the  sac- 
rifices which  it  entails.     In  the  second  place,  geograph- 
ical conditions  and  the  resulting  industrial  specialization 
have  placed  the  two  countries  in  a  different  attitude  to- 
ward certain  of  the  necessaries  of  life.     Great  Britain 
depends  upon  foreign  countries  for  a  large  part  of  her 
foodstuffs  and  for  such  commodities  as  wool  and  hides. 
The  United  States  is  an  exporter  of  food-stuffs  and  pro- 
duces most  other  commodities  in  considerable  measure. 
Whenever,   as  has  happened  during  the  war,   shipping 
facilities  are  restricted,  Great  Britain  is  much  more  sensi- 
tive to  the  danger  of  diminished   imports  than  is  the 
United  States.     Hence  a  different  attitude  of  the  state  to- 
ward the  food  supply.     Where  in  one  case  there  is  se- 
curity against  anything  worse  than  shortage,  in  the  other 
there  is  always  the  possibility  of  famine  conditions.     In 
the  matter  of  food,  as  of  ships,  England  can  afford  to  run 
no  risks,  and  in  the  case  of  certain  other  imported  com- 
modities it  is  not  at  all  to  her  advantage  to  do  so. 

Great  Britain's  long  experience  of  war  and  her  peculiar 
geographical  situation  thus  conduce  to  impel  her  farther 
in  the  direction  of  state  control  over  industry  than  the 
United  States  has  thus  far  gone.  It  might  be  pertinent  at 
this  point  to  inquire  which  nation  had  the  greater  pre- 
dilection for  such  control.     The  answer  cannot  be  far  to 


I 


seek.  England  since  the  eighteenth  century  has  become 
the  classic  land  of  laisses  faire.  Until  recently  her  later- 
day  statesmen  have  done  little  to  fetter  the  free  play  of 
competition  in  industry  and  commerce,  except  where  com- 
petition has  been  clearly  detrimental  to  the  welfare  of  her 
people.  Most  unreservedly  committed  to  the  doctrine  is 
the  Liberal  party,  in  whose  hands  lay  the  conduct  of  the 
war  for  more  than  two  years.  So  late  as  October,  19 16, 
Mr.  Barnes  could  charge  this  party  in  the  House  with 
secret  loyalty  to  its  long-professed  principles.  "  I  cannot 
help  thinking,"  said  he,  "  that  the  Government  have  had 
at  the  back  of  their  minds  a  mournful,  lingering  feeling 
of  regret  for  the  demise  of  an  antiquated  system  or  prin- 
ciple, which,  as  soon  as  the  war  began,  was  promptly 
thrown  overboard  as  useless  and  dangerous  for  the  pur- 
pose of  fighting  the  war.  It  has,  however,  been  allowed 
to  do  its  worst  in  regard  to  the  civil  population.  The 
policy  of  laissez  faire  is  no  more  good  in  regard  to  social 
economics  than  it  is  in  regard  to  fighting  the  war.  I  sub- 
mit to  the  President  of  the  Board  of  Trade  that  it  is  as 
dead  as  Queen  Anne."  ^  Whatever  be  the  truth  in  this 
charge  —  and  Mr.  Runciman  freely  professed  his  reluct- 
ance to  exert  control  until  it  was  necessary  —  the  Govern- 
ment can  scarcely  be  accused  of  precipitate  action.  Only 
in  respect  to  the  railways  and  the  sugar  supply  was  the 
state  put  in  immediate  charge.  Energetic  measures  in 
other  directions  date  largely  from  the  end  of  191 6. 

If  it  be  true  that  the  Liberal  Government  abandoned 

1  P.  D.  C,  1916,  Ixxxvi,  436. 


274 


WAR    TIME    CONTROL   OF    INDUSTRY 


its  laissez  faire  principles  only  reluctantly,  what  may  be 
said  about  the  attitude  of  the  United  States  toward  the 
same  doctrine?    Governmental  tradition  here  was  some- 
what different.     Whereas  throughout  the  second  half  of 
the  nineteenth  century  England  was  a  free  trade  country, 
during  the  same  period  industry  in  the  United  States  was 
fostered  by  high  protective  tariffs.     To  Americans  who 
had  pointed  out  that  capital  was  largely  benefited  thereby, 
it  was  answered  that  only  thus  could  the  wages  of  the 
industrial  labourer  be  maintained  at  a  level  which  raised 
him  above  his  European  fellow.     Thus  there  was  built 
up  the  tradition  that  state  interference  to  prevent  the 
unfettered  course  of  trade  was  legitimate  when  it  con- 
duced to  the  advantage  of  certain  classes  in  the  com- 
munity.    To  be  sure  the  political  party  in  power  when  the 
United  States  entered  the  war  had  not  subscribed  to  this 
doctrine;  but  just  before  1917  it  had  twice  given  its  sanc- 
tion to  state  interference  in  the  free  play  of  industrial 
forces.     By  the  Child  Labour  Act,  the  Democratic  party 
assumed  for  the  central  Government  authority  hitherto 
exercised  by  the  several  states,  the  power,  namely,  of  in- 
suring to  young  persons  in  factories  humane  conditions  of 
employment;  and  by  the  Adamson  Act  it  guaranteed  to 
certain  classes  of  railway  employes  an  eight  hour  day. 
Thus  tradition  and  sentiment  favourable  to  governmental 
regulation  of  industry,  after  being  fostered  by  the  Re- 
publican party  during  its  long  tenure  of  office,  had  been 
reinforced  by  the  action  of  the  Democratic  party  on  the 
eve  of  the  country's  entry  into  the  war. 


CONCLUSIONS    AND    COMPARISONS 


275 


If,  then,  at  the  end  of  1917  any  one  were  to  give  an  a 
priori  answer  to  the  question  whether  Great  Britain  or 
the  United  States  was  likely  to  have  gone  farther  in  the 
direction  of  state  control  over  industry,  the  reply  could 
scarcely  be  an  unqualified  statement.  Predilection  and 
tradition,  it  would  be  answered,  might  incline  the  United 
States  more  than  Great  Britain  toward  regulation  or  con- 
trol; on  the  other  hand,  Great  Britain's  peculiar  geo- 
graphical and  industrial  position  and  her  reaction  toward 
the  vicissitudes  of  a  long  war  would  probably  have  per- 
suaded her  to  adopt  the  more  energetic  measures.  In 
temperament  Great  Britain  would  be  the  more  hesitant, 
yet  circumstances  would  have  conspired  to  induce  her  to 
more  radical  action. 

If  now  the  respective  attitudes  of  the  two  governments 
toward  industry  at  the  end  of  1917  be  considered,  it  will 
appear  that  this  diagnosis  is  correct.  The  United  States 
was  still  to  a  considerable  extent  reliant  upon  the  volun- 
tary co-operation  of  its  citizens.  A  certain  number  of 
official  regulations  had  been  imposed,  two  industries  had 
been  taken  over,  and  a  third  was  likely  to  be.  Great 
Britain,  on  the  other  hand,  was  waiting  to  find  whether 
her  last  appeal  to  voluntary  effort  would  meet  with  a  satis- 
factory response;  if  it  should  not,  regulation  or  complete 
control  would  henceforth  prevail  wherever  the  industry 
was  one  of  war-time  importance  or  where  the  food  sup- 
ply of  the  population  was  in  question. 

In  the  United  States  the  appeal  for  voluntary  co-opera- 
tion from  business  men,  workers,  and  the  public  elicited 


2y6 


WAR   TIME    CONTROL   OF    INDUSTRY 


for  the  most  part  a  hearty  response.  Most  publicity  was 
given,  perhaps,  to  the  campaign  for  economy  in  the  con- 
sumption of  food.  The  avoidance  of  waste,  the  use  of 
substitutes  for  scarce  and  exportable  foods  like  sugar, 
meat,  butter,  and  wheaten  flour,  the  preference  for  whole- 
wheat bread  or  corn  bread  over  white  bread,  all  these 
economics  were  urged  upon  consumers.  They  were 
enforced  by  lectures  and  demonstrations  until  people  who 
had  never  heard  of  calories  began  to  draw  up  their  menus 
in  terms  of  that  abstruse  unit.  Housewives  were  asked 
to  pledge  themselves  to  adopt  all  recommendations  made 
by  the  Food  Administrator.  Various  flours  were  com- 
pounded by  mixing  inferior  grains  with  wheat  and  their 
general  use  was  recommended.  Relative  to  the  consump- 
tion of  only  one  food  did  the  Government  at  first 
make  any  approach  toward  compulsion.  It  authorized 
retailers  to  require,  if  they  so  desired,  the  purchase  of 
two  pounds  of  corn  meal  along  with  every  pound  of  sugar. 
Apart  from  this  the  consumer  was  not,  in  19 17,  ham- 
pered, save  by  the  force  of  public  opinion,  in  procuring 
what  foods  he  liked  and  in  using  them  as  he  liked.  In 
Great  Britain,  on  the  other  hand,  the  waste  of  food  had 
become  a  criminal  offence,  the  use  of  a  war-bread  made 
from  whole-wheat  flour  mixed  with  inferior  flours  was 
obligatory,  sugar  had  long  been  rationed,  and  other  food- 
stuffs were  henceforth  to  be,  if  the  second  energetic  cam- 
paign for  voluntary  rationing  should  prove  ineffective. 
In  the  use  of  food,  compulsion  had  become  the  rule  while 


«^(^,-%W'*)W^fe'«W!SA%M*''«l^  S«S«('m(S«iiflt&SiKmS«l»*'3«lf  ^^^ 


CONCLUSIONS   AND    COMPARISONS 


2yy 


co-operation  still  remained  the  privilege  of  American  con- 
sumers. 

Voluntary  co-operation  also  proved  feasible  between 
the  United  States  Government  and  its  industrial  leaders 
in  respect  to  the  acquisition  of  certain  important  commo- 
dities. In  the  summer  of  191 7  contracts  had  to  be  placed 
for  enormous  quantities  of  steel  and  copper  for  munitions 
and  ships,  and  these  metals  were  commanding  very  high 
prices  in  a  war  market.  The  Government,  accordingly, 
approached  the  producers  to  see  whether  an  arrangement 
could  be  made  advantageous  to  itself  and  to  the  Allied 
powers,  henceforth  its  fellow-purchasers.  Behind  the  in- 
vitation lay,  of  course,  the  intimation  that  concessions 
would  be  necessary.  Conscription  of  factories  as  well 
as  conscription  of  men  was  always  possible.  No  threats, 
however,  were  needed,  and  the  producers  of  steel  and  cop- 
per readily  accepted  the  prices  which  the  Government,  act- 
ing on  the  advice  of  the  Federal  Trade  Commission,  of- 
fered. This  achievement  in  voluntary  co-operation  left 
a  large  sphere  of  essential  war  industry  free  from  gov- 
ernmental control.  Here  again  English  experience  has 
differed  and  has  carried  His  Majesty's  Government  much 
farther.  Anxious  to  increase  the  output  of  munitions  at 
the  beginning  of  the  war,  the  Ministry,  by  the  Defence  of 
the  Realm  Act,  assumed  power  to  turn  into  munitions- 
making  establishments  all  plants  suitable  therefor.  To 
still  the  complaint  of  labour  about  proprietors'  profits,  the 
Munitions  of  War  Act  next  imposed  a  limit,  restricting 


278 


WAR    TIME    CONTROL   OF    INDUSTRY 


CONCLUSIONS   AND    COMPARISONS 


279 


profits  to  the  average  return  of  the  two  years  before  the 
war.     The  situation  thus  created  differs  somewhat  from 
that  prevaihng  in  America.     Profits  allowed   to  muni- 
tions-makers in  Great  Britain  are  less  than  those  accruing 
to  the  steel  and  copper  producers  in  the  United  States; 
for  pre-war  profits  were  smaller  than  are  those  of  1917 
even  though  the  latter  have  been  reduced  by  rising  costs. 
The  American  Government,  however,   reasoned  that  a 
considerable  part  of  the  profits  still  accruing  to  producers 
would  be  swallowed  up  by  the  excess  profits  tax  and  felt 
further  that  essential  industries  should  not  be  left  with- 
out   stimulus.     English    establishments,    again,    found 
themselves   "controlled"   in  other  respects.     Not   only 
were  they  required  to  submit  to  the  Ministry  of  Munitions 
all  their  rules  affecting  employes  but  they  likewise  were 
subjected  to  elaborate  priority  regulations.     Priority,  of 
course,  is  to  be  given  in  the  United  States  to  Government 
needs ;  but  the  procuring  of  a  permit  or  the  showing  of  a 
contract  for  warwork  is  not  yet  a  pre-requisite  for  the 
getting  of  any  steel  or  copper  by  a  private  buyer,  as  it  is 
in  Great  Britain. 

Closely  associated  with  the  British  control  of  muni- 
tions plants  is  the  control  over  labour.  Both  were  es- 
tablished by  the  Munitions  of  War  Act,  1915.  In  the 
United  States  labour  is  still  free.  Certain  unions  about 
to  strike  have,  indeed,  been  asked  by  President  Wilson  to 
submit  their  request  for  wages  to  arbitration  and  in  the 
case  of  other  labour  demands  there  undoubtedly  will  be 
urged  similar  resort  to  an  arbitration  tribunal.     America, 


however,  has  not  yet  enacted  a  law  providing  for  com- 
pulsory arbitration.  The  assent  of  many  of  the  unions 
affected  would  first  have  to  be  got  as  it  was  in  England, 
nor  is  it  certain  that  such  assent  could  be  secured.  Yet, 
if  continual  readjustments  accompanied  by  threats  of 
strike  are  to  be  avoided,  either  such  a  law  or  the  unswerv- 
ing co-operation  of  the  unions  with  the  Government  seems 
essential.  The  problem  is  undoubtedly  the  most  difficult 
of  all  those  created  by  the  war.  The  United  States  has 
as  yet  scarcely  faced  it.  Great  Britain  in  the  Munitions 
of  War  Act  and  in  the  measures  by  which  it  has  been 
amended  may  have  found  as  satisfactory  a  solution  as  is 
possible.  Arbitration  has  with  her  become  to  a  con- 
siderable degree  compulsory  and  where  it  was  not  ac- 
cepted, as  it  was  not  by  the  miners,  state  control  eventually 
became  necessary.  The  policy  of  fettering  labour  by  the 
requirement  of  leaving  certificates  \\n\\  scarcely  recom- 
mend itself  to  American  legislators,  the  more  in  that  it 
has  proved  a  failure  in  England.  The  dilution  of  la- 
bour, on  the  other  hand,  by  the  employment  of  unskilled 
men  and  women  is  likely  to  become  necessary  in  the 
United  States,  as  it  has  become  in  England.  Unless  in 
their  attitude  toward  war-work  the  trade  unions  remain 
heartily  co-operative,  it  is  not  improbable  that  meas- 
ures resembling  the  Munitions  of  War  Act  may  have 
to  be  resorted  to  in  America.  In  its  attitude  toward  la- 
bour as  in  that  toward  the  producers  of  steel  and  copper 
the  United  States  government  is  still  relying  upon  volun- 
tary co-operation.     Great  Britain  found  such  reliance  in- 


28o 


WAR   TIME    CONTROL   OF    INDUSTRY 


adequate,  and  for  two  and  one-half  years  has  resorted, 
not,  to  be  sure,  to  complete  control,  but  to  very  stringent 
regulation. 

Extensively  as  the  United  States  has  trusted  to  the  vol- 
untary co-operation  of  its  citizens  in  the  fields  of  produc- 
tion and  consumption,  it  has  in  certain  instances  resorted 
to  governmental  regulation.  Most  noteworthy  is  the  de- 
termination of  the  selling  price  of  wheat,  the  regulation 
of  the  distribution  and  sale  of  other  important  food- 
stuffs, and  the  supervision  of  the  apportionment  of  im- 
ported wool  and  hides. 

On   August  30  the   United   States   Government  an- 
nounced what  it  thought  should  be  the  maximum  price 
for  the  wheat  crop  of  1917.     In  the  Food  Control  Act, 
which  had  become  law  on  August  10,  the  farmer  was 
guaranteed  a  minimum  price  of  $2.00  a  bushel  for  the 
wheat  harvest  of  1918.     The  Act  contained  no  provision 
for  either  a  maximum  or  a  minimum  price  for  the  1917 
crop.     The  Government  was,   however,   empowered  to 
purchase  wheat  for  itself  and  the  Allies,  and  at  once  ap- 
pointed a  committee,  representative  of  all  interests  and 
sections,  to  determine  a  fair  price.     The  price  reported 
and  adopted  was  $2.20  per  bushel  at  Chicago  for  the  basic 
grade.     The  Government  intimated  that  it  would  not  be 
content  with  limited  purchases  but  was  prepared  to  buy 
the  entire  crop  of  the  country  if  such  action  should  be 
necessary  to  stabilize  prices.     The  Food  Administrator 
had  already  announced  that  all  elevators  and  all  large 
mills    would    be    brought    under    a    licencing    system. 


CONCLUSIONS    AND    COMPARISONS 


281 


Hoarding  and  speculation  would  thereby  be  eliminated. 
By  this  device  the  price  of  wheat,  although  not  tech- 
nically fixed  for  the  community  at  large,  was  practically 
determined.  When  the  Government,  through  a  newly 
established  Grain  Corporation,  began  to  buy  wheat  as  it 
came  in  at  the  elevators,  there  was  no  friction.  The  far- 
mer was,  of  course,  under  no  compulsion  to  sell  his  grain 
at  the  Government's  price  and  many  producers  did  hold 
back  their  stores.  So  far,  however,  as  the  transactions  of 
middlemen  were  concerned  profiteering  was  eliminated. 

The  action  of  England  relative  to  the  wheat  supply  was 
at  first  more  hesitant,  but  in  the  end  somewhat  more  com- 
prehensive. At  intervals  from  the  beginning  of  the  war 
His  Majesty's  Government  purchased  large  stores  of  im- 
ported wheat,  anxious  to  maintain  a  food  reserve  for  the 
nation.  The  sale  of  these  stores  at  opportune  times 
served  to  quiet  an  excited  and  rising  market.  Apart 
from  making  purchases  and  sales,  the  Government  after 
1915  tried  to  modify  the  price  of  imported  wheat  by  ex- 
erting control  over  ocean  tonnage.  It  was  not,  however, 
until  the  spring  of  19 17  that  maximum  prices  for  domestic 
wheat,  oats,  and  barley  were  established.  In  the  sum- 
mer the  policy  was  continued  by  the  announcement  of 
maximum  prices  for  the  cereal  harvest  of  19 18.  Mean- 
while the  Government  was  planning  to  fix  a  selling  price 
for  bread,  lower  than  one  warranted  by  its  own  maximum 
prices  for  wheat  and  flour.  The  loss  incurred  would,  it 
was  stated,  be  met  by  the  Exchequer.  In  this  way  Eng- 
lish regulations  have  shown  themselves  even  more  favour- 


282 


WAR   TIME   CONTROL   OF    INDUSTRY 


able  to  the  consumer  than  have  those  of  the  United  States. 
To  the  producer,  also,  greater  guarantees  have  been  of- 
fered. Whereas  the  United  States  in  the  Food  Act  as- 
sures the  farmer  a  minimum  price  for  his  wheat  in  191 8, 
Great  Britain  guarantees  liberal  prices  over  a  period  of 
six  years.  Owing  to  the  submarine  menace  it  was  neces- 
sary for  her  to  stimulate  the  domestic  production  of  ce- 
reals. Even  a  minimum  wage  for  agricultural  labourers 
has  become  statutory,  in  the  hope  that  adequate  labour  will 
be  available  on  the  farms.  Geographical  isolation  and 
laggard  agricultural  wages  have  thus  prompted  the  pro- 
visions of  the  Corn  Production  Bill,  circumstances  neither 
of  which  are  characteristic  of  the  United  States.  On  the 
other  hand,  so  far  as  both  countries  have  felt  the  need  of 
regulations  favourable  to  the  consumer  and  to  the  pro- 
ducer of  cereals,  but  restrictive  toward  the  middleman, 
they  have  acted  similarly.  One  has  been  more  prompt, 
the  other  more  thorough-going. 

The  form  of  regulation  adopted  in  the  United  States 
to  control  the  price  of  wheat  readily  lent  itself  to  ex- 
tension. Since  no  power  had  been  conferred  upon  the 
Executive  to  fix  prices  for  foodstuffs,  all  that  could  be 
done  was  to  check  profiteering  on  the  part  of  middlemen. 
To  this  end  the  system  of  licencing  was  admirably 
adapted.  At  the  end  of  19 17  it  had  been  applied  not  only 
to  the  sale  of  wheat,  but  to  the  distribution  of  many  other 

foodstuffs. 

First  to  claim  attention  after  wheat  was  sugar.  The 
world  shortage  in  this  commodity  made  itself  acutely  felt 


CONCLUSIONS    AND    COMPARISONS 


283 


in  the  United  States  late  in  the  summer  of  191 7.  Hold- 
ers of  the  remainder  of  the  Cuban  crop  were  asking  ex- 
orbitant sums  for  their  sugar  and  retail  prices  in  August 
rapidly  advanced  2  or  23^  cents  a  pound.  The  new 
Cuban  crop  would  not  be  available  until  the  end  of  the 
year.  After  September,  however,  the  800,000  tons  which 
constitute  the  beet  sugar  crop  of  the  United  States,  would 
come  upon  the  market.  Mr.  Hoover,  accordingly,  ap- 
proaching the  beet  sugar  producers,  asked  for  their  co- 
operation. This  was  readily  granted  and  it  was  agreed 
that  their  product  should  be  sold  at  a  price  which  would 
reduce  the  prevailing  market  price  by  i^  cents  a  pound 
and  save  the  public  some  $30,000,000  before  the  end  of 
the  year. 

The  Food  Administrator  next  turned  to  the  distribu- 
tors. In  view  of  the  terms  conceded  by  the  beet  sugar 
growers,  refined  sugar,  it  was  computed,  ought  to  sell  for 
$8.35  a  hundred  weight  and  for  less  toward  the  end  of 
the  year.  The  wholesaler  should  be  entitled  to  add  a 
charge  of  25  cents  a  hundred  w^eight  and  upon  this  basis 
it  was  found  that  sugar  could  be  sold  to  the  consumer  at 
9J^  cents  in  the  South  and  in  the  Atlantic  seaboard  states, 
and  for  somewhat  less  north  of  the  Ohio  and  west  of  the 
Mississippi.  To  insure  that  wholesalers  and  retail- 
ers should  keep  very  nearly  within  these  limits  the  Gov- 
ernment introduced  its  licencing  scheme.  All  dealers 
were  required  to  secure  a  federal  licence  in  order  to  carry 
on  business,  and  the  Government  was  prepared  to  with- 
hold licences  and  supplies  from  any  firms  w^hich  might 


284 


WAR   TIME   CONTROL   OF    INDUSTRY 


attempt  to  realize  undue  profits.  Refiners  and  whole- 
salers were  instructed  not  to  supply  retailers  who 
charged  exorbitant  prices,  and  Federal  Food  Administra- 
tors were  detailed  to  different  districts  both  to  inform  the 
public  of  proper  prices  and  to  report  delinquencies  on  the 
part  of  dealers.  To  conserve  the  supply,  confectioners 
were  put  on  rations,  and  to  increase  it  a  $13,000,000  pur- 
chase was  made  in  Louisiana.  Stores  acquired  by  the 
British  Government  were  released  for  the  American  mar- 
ket. Although  instances  of  excessive  charges  and  of 
the  hoarding  of  sugar  were  for  a  time  reported,  the  adapt- 
ation of  the  sugar  trade  to  the  new  regulations  was  rea- 
sonably prompt  and  a  stability  of  prices  like  that  at- 
tained in  the  wheat  trade  soon  resulted. 

Before  the  end  of  the  year  further  steps  were  taken 
looking  toward  the  future.  On  investigation  by  the  Food 
Administration  it  was  found  that  the  cost  of  refining  cane 
sugar  was  $1.30  a  hundred  weight.  After  prolonged 
negotiations  the  refiners  were  persuaded  to  reduce  their 
charges  from  about  $1.84  to  this  amount  and  it  was  es- 
timated that  the  saving  to  American  consumers  in  1918 
would  be  $25,000,000.  To  apportion  all  imported  sugar 
fairly  among  American  refiners,  a  committee  representa- 
tive of  cane  sugar  refiners  was  appointed;  and  to  arrange 
for  the  transportation  of  foreign  sugar  and  its  distribu- 
tion among  the  Allies,  representatives  of  the  English, 
French,  Italian,  and  American  Governments  were  to  meet. 
The  Cuban  crop  was  bought  by  the  Allied  Governments 
at  about  $4.60  a  hundred  weight  (or  $6.00  delivered  in 


CONCLUSIONS   AND    COMPARISONS 


285 


New  York),  a  price  which  should  put  sugar  into  the  hands 
of  the  American  consumer  in  1918  at  from  83^  to  9  cents 
a  pound.  Mr.  Hoover  declared  that  speculation  in  sugar 
and  the  taking  of  excessive  profits  had  been  eliminated.^ 

At  the  same  time  that  licencing  was  applied  to  the 
sugar  trade,  it  was  extended  to  many  other  foodstuffs. 
Ill  the  middle  of  October  it  was  announced  that  on  and 
after  November  i  licences  would  be  required  for  dealing 
in  all  foods  which  form  '*  the  prime  basis  of  life."  Eggs, 
poultry,  milk,  meat,  vegetables,  sugar,  flour,  bread,  wheat 
and  other  cereals,  fish,  and  canned  goods  were  designated. 
All  persons  engaged  in  the  import,  manufacture,  storage, 
and  distribution  of  such  foodstuffs  were  required  to  se- 
cure a  licence  from  the  Food  Administrator  and  among 
the  middlemen  in  question  were  specified  meat  packers, 
cold  storage  warehousemen,  millers,  canners,  grain  deal- 
ers, wholesale  distributors,  and  retailers  doing  a  business 
of  more  than  $100,000  a  year.  Since  small  grocers 
would  scarcely  be  able  to  charge  more  than  the  large  re- 
tailers, it  was  expected  that  the  system  would  tend  to 
stablize  the  entire  retail  market.  So  flexible  and  adapt- 
able was  the  licencing  system  proving  that  the  ends  at- 
tainable by  it  were  practically  the  ends  aimed  at  by  a  sys- 
tem of  direct  price  fixing. 

The  United  States,  therefore,  within  eight  months 
after  its  entrance  into  the  war  had  taken  action  to  restrain 
a  rise  in  the  price  of  essential  foodstuffs  such  as  England 
had  in  general  resorted  to  only  in  the  third  year  of  the 

2N.  Y.  Times,  Dec.  26,  1917. 


286 


WAR    TIME   CONTROL   OF   INDUSTRY 


CONCLUSIONS   AND    COMPARISONS 


287 


conflict.  Mr.  Hoover  put  the  issue  clearly  before  a  war 
convention  of  business  men  held  at  Atlantic  City  on  Sep- 
tember 19.  "If  we  are  to  have  ascending  prices  we  must 
have  ascending  wages.  But  as  the  wage  level  rises  with 
inequality  it  .  .  .  [leads]  to  strikes,  disorder,  riots,  and 
defeat  of  national  efficiency.  The  verdict  of  the  world's 
experience  is  in  favour  of  price  control  as  the  lesser 
evil."  This  was  the  conclusion  to  which  England  had 
been  forced  at  the  beginning  of  1917.  Once  convinced, 
she  adopted  out-and-out  methods  of  price  fixing.  Prices 
were  based  upon  the  formula  which  alone  has  stood  the 
test  of  experience.  At  every  stage  in  its  manufacture 
the  price  of  a  commodity  should  represent  the  cost  of  its 
production  increased  by  a  reasonable  profit  for  the 
producer.  When  the  United  States'  scheme  of  licencing 
dealers  in  foodstuffs  went  into  effect,  England  had  al- 
ready fixed  maximum  prices  for  most  articles  of  food. 
The  control  was  more  direct,  since  violation  of  a  price 
order  became  a  criminal  offence,  punishable  in  the  courts. 
In  America  the  indirect  control,  which  would  take  from 
a  dealer  his  licence  or  in  the  case  of  a  small  retailer  sub- 
ject him  to  the  competition  of  large  concerns,  is  less  pre- 
cise but  will  probably  prove  no  less  efficacious.  Both 
schemes  are  alike  in  principle,  aiming  to  protect  the  con- 
sumer against  undue  profit-taking  on  the  part  of  all 
dealers  in  foodstuffs. 

In  two  respects  England  has  gone  farther  in  an  en- 
deavour to  protect  the  consumer.  Sugar  is  not  merely 
sold  at  a  price  fixed  by  the  Government  —  a  regulation 


which  dates  from  the  beginning  of  the  war  —  but  it  has 
also  since  the  autumn  of  19 17  been  impartially  distributed 
in  limited  amounts  to  consumers.  This  action  followed 
upon  long-continued  complaints  about  unfair  distribution 
both  to  communities  and  to  individuals.  The  American 
scheme  scarcely  provides  against  such  contingencies  but 
the  degree  of  scarcity  which  makes  them  possible  may 
not  come  to  prevail  in  the  United  States.  The  other 
regulation  relative  to  foodstuffs  in  which  Great  Britain 
has  been  more  radical  than  America  is  the  selling  of 
bread  at  a  price  lower  than  the  market  —  even  a  con- 
trolled market  —  w^arrants.  This  subsidizing  of  bread 
is  an  expedient  to  which  a  Government  has  recourse  only 
as  a  last  resort.  It  is  not  impossible  that,  had  the  British 
Cabinet  striven  from  the  beginnig  of  the  w^ar  to  eliminate 
middlemen's  profits  in  foodstuffs,  it  would  have  avoided 
the  growth  of  popular  distrust  and  criticism  which  made 
the  step  necessary.  Even  the  poor  do  not  rebel  against 
hardships  which  they  feel  are  created  by  the  circum- 
stances of  the  war  and  which  are  shared  by  all  classes 
alike.  Nothing,  on  the  other  hand,  makes  the  worker 
angrier  than  to  see  the  well-to-do  profiting  by  the  nation's 
disaster  and  profiting  in  part  at  his  expense.  Great 
Britain  is  paying  the  penalty  for  allowing  this  temper  to 
devlop  by  being  obliged  to  subsidize  bread.  It  will  be  the 
triumph  of  American  regulation  if  charges  like  those 
which  have  been  made  in  England  since  the  early  months 
of  the  war  can  be  avoided.  English  experience  relative 
to  essential  foodstuffs  seems  to  be  that  state  control  of 


288 


WAR    TIME    CONTROL   OF    INDUSTRY 


prices  is  necessary,  if  the  great  mass  of  consumers  are 
not  to  be  antagonized,  and  that  the  sooner  such  control  is 
assumed  the  wiser  and  more  economical  it  is  for  the  Gov- 
ernment concerned. 

Government  regulation  in  the  United  States  has  taken 
the  form  not  only  of  fixing  prices  for  wheat  and  of  super- 
vising the  sale  of  important  foodstuffs,  but  at  the  end  of 
1 91 7  it  was  invoked  relative  to  imports  of  wool,  leather, 
rubber,  and  a  few  other  commodities.  In  an  official  an- 
nouncement of  December  14,  the  War  Trade  Board  ex- 
plains why  in  the  case  of  wool  the  step  became  necessary.^ 
Although  at  the  time  the  price  of  this  commodity  in  Eng- 
land was  only  55  per  cent,  in  excess  of  its  pre-war  price, 
the  advance  in  the  United  States  had  been  200  per  cent. 
Nor  was  the  rise  in  any  considerable  degree  due  to  the 
new  military  demands.  The  supply  of  wool  in  the  coun- 
try was  ample  for  the  needs  of  the  present  and  the  imme- 
diate future.  Inasmuch  as  the  clip  in  most  wool-produc- 
ing countries  had  increased  and  might  reasonably  be  ex- 
pected not  to  decrease,  there  was  no  prospective  shortage 
in  the  world's  supply.  Consumption  in  the  United  States 
during  1918  would  be  little  if  at  all  greater  than  in  1917. 
Through  the  influence  of  the  Commercial  Economy 
Board,  substitutes,  too,  were  being  introduced  and  wool 
itself  was  being  diverted  from  less  essential  to  more 
essential  products.  The  excessive  advance  in  price  was 
in  reality  due  to  speculation  and  to  hoarding.  Importers 
had  speculated  in  an  hysterical  market;  cloth  manufac- 

»Ibid.,  Dec.  15,  1917,  p.  2. 


CONCLUSIONS   AND   COMPARISONS 


289 


turers  in  distrust  were  carrying  abnormal  stocks  of  wool 
and  were  contracting  with  importers  for  unusual  quan- 
tities for  far  forward  delivery;  manufacturers  of  cloth- 
ing were  purchasing  cloth  in  excess  of  their  reasonable 
needs. 

Deprecating  such  action,  the  War  Trade  Board  at- 
tempted to  check  it  by  two  regulations.  Applicants  for 
import  licences  were  henceforth  required  to  agree  not  to 
sell  to  any  person  other  than  a  manufacturer  without  the 
consent  of  the  Board,  and  the  United  States  Government 
reserved  to  itself  the  right  to  purchase  within  ten  days 
after  Custom  House  entry  any  imported  wool  at  a  price 
5  per  cent,  less  than  the  basis  price  of  similar  wool  in  the 
Boston  market  on  July  30,  19 17.  The  first  regulation 
was  designed  to  prevent  speculation,  the  second  to  check 
the  rise  of  prices  by  setting  a  Government  valuation. 
That  the  Board  might  be  assisted  in  carrying  out  these 
measures  and  in  procuring  an  equitable  distribution  of 
wool  to  the  most  essential  industries,  committees  from 
the  wool  trade  and  the  other  trades  concerned  were  ap- 
pointed. It  became  the.  duty  of  these  committees  to 
gather  for  the  Government  information  in  the  various 
trades,  to  act  as  consignees  of  imported  wool  and  other 
commodities,  keeping  record  of  the  extent  of  the  imports 
and  releasing  them  to  importers  under  the  required  guar- 
antee, and,  finally,  to  observe  the  disposition  of  the  im- 
ports and  the  observance  by  the  importers  of  their 
pledges. 

In  the  case  of  wool  this  scheme  of  regulation  stands 


290 


WAR   TIME    CONTROL   OF    INDUSTRY 


in  contrast  with  the  more  complete  control  developed  in 
England  during  the  course  of  the  war.     In  the  United 
States  the  home  clip  is  still  unaffected ;  foreign  wool  may 
still  be  bought  by  private  importers  subject  to  the  Govern- 
ment's right  of  pre-emption  and  the  Government's  licence 
for  resale.     If  importers  refrain  from  speculation  they 
may  still  sell  much  of  their  wool  to  manufacturers  at 
a  favourable  price.     How  far  the  Government's  option 
may  be  exercised  to  keep  prices  below  the  level  of  July  30, 
19 1 7,  will  probably  depend  upon  circumstances.     Wool 
will  certainly  be  diverted  to  essential  industries;  but  if 
the  supply  continues  liberal,  as  is  hoped,  and  if  substitutes 
are  developed,  there  is  no  reason  why  less  essential  in- 
dustries need  suffer.     In  England,  on  the  other  hand,  the 
home  clip  has  twice  been  commandeered  by  the  Govern- 
ment, the  Australasian  clip  twice  bought,  and  the  distribu- 
tion  of   all  has  been   strictly  controlled.     Indeed,   the 
method  of  control,  especially  the  rationing  which  became 
necessary  in  the  summer  of  19 17,  brought  sharp  criticism 
from  the  trade.     Only  by  the  establishment  of  a  Board 
representative  of  the  trade  and  by  the  resumption  of 
somewhat  more  liberal  apportionments  was  the  dissatis- 
faction at  all  allayed.     The  motives  which  induced  the 
English  and  American  Governments  to  assume  control 
over  wool  differed  somewhat  and  in  this  lay  the  reason 
for  different  procedure.     England  was  concerned  about 
both  the  supply  and  the  rise  in  price;  the  United  States 
professes  assurance  regarding  supplies,  but  great  concern 
about  high  prices.     Since  English  complaints  arose  from 


CONCLUSIONS   AND   COMPARISONS 


291 


rationing  rather  than  from  the  closing  of  a  free  mar- 
ket, American  manufacturers  need  not  expect  from  the 
new  regulations  hardships  like  those  experienced  in  Eng- 
land, but  pronounced  benefits  instead.  The  American 
scheme  is  a  simple  one  to  check  rising  prices.  Unless 
the  supply  of  wool  diminishes  or  unless  hoarding  and 
speculation  continue,  there  would  seem  to  be  no  reason 
why  the  United  States  Government  should  purchase 
either  the  home  or  a  foreign  wool  clip.  The  same  rea- 
soning applies  to  hides  and  leather,  commodities  which 
the  English  Government  itself  does  not  control  to  the 
extent  that  it  controls  wool.  What  England  has  demon- 
strated in  the  case  of  wool  is  that  government  action  can 
keep  prices  within  bounds,  and  this  for  America  has  be- 
come a  matter  of  some  concern. 

In  only  two  fields  of  industry  had  the  United  States 
Government  by  the  close  of  19 17  assumed  complete  con- 
trol, although  in  a  third  it  seemed  about  to  do  so.  The 
two  were  shipping  and  railway  transportation,  the  third 
was  the  working  of  the  coal  mines.  In  the  case  of  ship- 
ping, the  action  had  been  most  prompt.  On  October  15, 
191 7,  all  merchant  ships  above  2500  tons  gross  were  re- 
cpiisitioned,  practically  blue-book  rates  were  fixed,  and 
the  movement  of  the  vessels  in  question  was  henceforth 
at  the  Government's  will.  Such  decisive  action  on  the 
part  of  the  state  is  in  marked  contrast  with  British  policy, 
although  the  latter  is  at  length  in  accord. 

Nothing  probably  provoked  more  bitter  charges  of 
profiteering  in  England  and  caused  more  popular  discon- 


292 


WAR    TIME    CONTROL    OF    INDUSTRY 


tent  than  did  the  liberty  long  granted  to  a  part  of  the 
British  mercantile  marine  to  charge  high  freights.     The 
annual  reports  of  steamship  companies  confirmed  the  sus- 
picion  harboured   by   the   indignant    British   consumer. 
The  legislation  demanded  relative  to  the  cost  of  food  wa^ 
closely    connected    with    the   cry    that    the    Government 
should  control  shipping  rates.     Slowly  the  Government 
yielded.     At  first  it  acted  to  secure  the  army's  supply  of 
meat  from  the  Argentine  at  reasonable  prices;  next  it 
deflected  tonnage  to  the  North  Atlantic  to  insure  the  grain 
supply;  lastly,  it  substituted  for  the  agreement  by  which 
these  grain  boats  were  bringing  their  cargoes  its  own 
blue-book  rates.     Public  opinion  was  slowly  won  over 
and  by  the  autumn  of  1917  the  subsidized  loaf  at  length 
convinced  it  that  the  Government  preferred  to  pay  for 
bread   rather  than  attempt   further  to   reduce  shipping 
rates.     The  United  States  was  not  of  course  in  a  position 
to  suffer  in  the  same  way  as  England  from  high  oceanic 
freights,  nor  was  its  mercantile  marine  comparable  in 
size  with  that  of  Great  Britain.     Although,  therefore,  the 
problem  in  America  was  a  simpler  one,  the  promptitude 
with   which   it    was   handled,    embodies,    whether   con- 
sciously or  not,  the  wisdom  got  by  Great  Britain  through 
bitter  experience. 

In  another  respect  the  United  States  took  more  de- 
cisive action  than  did  Great  Britain  in  the  matter  of  mer- 
chant shipping.  By  appropriation  of  Congress  in  19 17 
and  1918  neariy  $2,000,000,000  will  be  devoted  to  the 
building  of  a  large  merchant  marine  to  supplement  the 


CONCLUSIONS    AND    COMPARISONS 


293 


small  one  already  existing.  The  need  for  ships  to  carry 
troops  and  supplies  to  Europe,  is,  of  course,  imperative. 
Since  private  firms,  even  if  subsidized,  could  not  be 
trusted  to  build  the  requisite  tonnage,  the  Government  was 
forced  to  become  the  builder  and  owner  of  a  mercantile 
fleet.  Great  Britain  had  different  and  more  encourag- 
ing traditions.  Annually  her  shipbuilders  had  turned  out 
some  2,000,000  tons  of  merchant  shipping,  the  Govern- 
ment at  most  advancing  a  subsidy  to  steamship  lines  which 
carried  mails  or  would  put  their  ships  at  the  Government's 
disposal  in  time  of  war.  When  the  submarine  ravages 
of  19 1 7  made  necessary  the  increased  building  of  mer- 
chant ships,  the  old  methods  could  be  relied  upon.  Only 
labour  and  skill  had  to  be  put  at  the  disposal  of  the  ship- 
building firms.  The  Government  thus  avoided  the  direct 
responsibility  thrust  upon  the  United  States,  that  of  be- 
coming a  merchant  shipper  on  its  own  account.  The 
administrator  of  an  enormous  amount  of  requisitioned 
tonnage  Great  Britain  has  temporarily  become;  but  she 
has  at  least  escaped  this  last  venture  in  industrial  initi- 
ative. The  United  States,  in  general  more  reliant  upon 
the  voluntary  action  of  its  citizens,  has  in  this  matter 
been  obliged  to  take  the  more  radical  step. 

The  second  great  industry  of  which  the  United  States 
has  taken  complete  control  is  railway  transportation. 
For  a  time  after  the  outbreak  of  the  war  it  seemed  as  if 
reliance  upon  the  voluntary  action  of  railway  men  might 
prove  efficacious.  The  fifty  leading  railway  presidents 
of  the  country  declared  themselves  ready  to  eliminate 


294 


WAR    TIME    CONTROL   OF   INDUSTRY 


competition  and  to  co-operate  in  problems  of  transporta- 
tion.    Independent    companies    resigned    for    the    time 
their  freedom  of  action,  and  entrusted  to  a  commission 
of  five  experienced  men  chosen  by  the  President  of  the 
United  States  the  determination  of  important  policies. 
This   Railroads'   War  Board  at  once  devoted  itself  to 
co-ordinating    the    railway    resources    of    the    country. 
Through  its  efforts  needless  passenger  trains  were  taken 
off,  freight  congestion  was  often  averted  by  the  skilful 
handling  of  empty  cars,  large  quantities  of  supplies  and 
many  thousands  of  men  were  expeditiously  transported 
for  military  purposes.     ''  It  was  thought  to  be  in  the 
spirit  of  American  institutions,"  said  President  Wilson 
in  December,   ''to  attempt  to  do  everything  that  was 
necessary  through  private  management,  and  if  zeal  and 
ability  and  patriotic  motive  could  have  accomplished  the 
necessary  unification   of   administration,   it  would   cer- 
tainly have  been  accomplished ;  but  no  zeal  or  ability  could 
overcome  insuperable  obstacles.  .  .  ."  ^ 

The  obstacles  in  question  had  become  only  too  appar- 
ent at  the  time  when  he  spoke.  Increasing  costs  of 
operation,  due  largely  to  advancing  wages  and  the  high 
price  of  commodities,  diminished  the  net  returns  of  nearly 
all  roads,  and  demands  for  still  higher  wages  were  in  the 
air.  Although  the  appeal  of  the  Eastern  roads  to  the 
Interstate  Commerce  Commission  for  an  increase  in 
freight  rates  seemed  assured  of  a  cordial  reception,  it 
quickly  became  apparent  that  this  remedy  would  not  meet 

*  Ibid.,  Dec.  27,  1917,  P-  2. 


CONCLUSIONS   AND    COMPARISONS 


295 


all  difficulties.  Greater  sums  of  money  than  higher 
freights  would  promptly  yield  were  essential  and  could 
be  obtained  in  the  market  only  at  ruinous  rates  of  interest. 
Several  roads  which  with  public  spirit  had  responded  to 
the  desires  of  the  Railroads'  War  Board  had,  owing  to 
circumstances,  suffered  peculiarly  from  so  doing.  At  the 
same  time  transportation  demands  became  so  great  that 
congestion  of  traffic  ensued.  The  issue  of  priority  or- 
ders —  orders  which  were  sometimes  in  conflict  —  only 
increased  the  confusion  and  delay.  At  this  point  the 
Interstate  Commerce  Commission  recommended  one  of 
two  remedies.  Either  the  Government  should  take  over 
the  administration  of  the  railways  during  the  war,  ren- 
dering therefor  suitable  compensation  and  providing  ade- 
quate maintenance,  or,  if  the  roads  were  left  in  the  hands 
of  the  companies,  there  should  be  granted  an  increase  in 
freights  and  a  loan  from  the  Government,  while  legisla- 
tive hindrances  to  combination  should  be  suspended. 

Of  the  alternatives  the  Government  chose  the  first. 
"  It  has  become  unmistakably  plain,"  declared  President 
Wilson,  *'  that  only  under  Government  administration 
can  the  entire  equipment  of  the  several  systems  of  trans- 
portation be  fully  and  unreservedly  thrown  into  a  com- 
mon service  without  injurious  discrimination  against  par- 
ticular properties.  Only  under  Government  administra- 
tion can  an  absolutely  unrestricted  and  unembarrassed 
common  use  be  made  of  all  tracks,  terminals,  terminal 
facilities,  and  equipment  of  every  kind.  Only  under  that 
authority  can  new  terminals  be  constructed  and  developed 


296 


WAR    TIME    CONTROL    OF    INDUSTRY 


without  regard  to  the  requirements  or  limitations  of  par- 
ticular roads."  ^ 

By  proclamation  of  December  26,  1917,  the  President, 
therefore,  announced  that  on  December  2S  he  would  take 
possession  of  all  railway  systems  in  the  United  States. 
Appointing  the  Secretary  of  the  Treasury,  Mr.  W.  G. 
McAdoo,    Director    General    of    Railroads,    he    recom- 
mended to  Congress  provisions  for  the  maintenance  of 
the  equipment  of  the  roads  during  the  period  of  Federal 
control  and   for  the  payment  of  net  operating  income 
equal  in  each  case  to  the  average  net  income  of  the  three 
years  preceding  June  30,  1917.     Mr.  McAdoo's  first  in- 
structions to  railway  presidents  directed  them  to  continue 
the  operation  of  their  roads  and  to  use  every  effort  to 
increase  efficiency,  particularly  in  moving  traffic  by  the 
most  convenient  and  expeditious  routes.     The  existing 
Railroads'   War  Board   was  continued,  as   well  as  the 
various  co-operating  committees  that  it  had  formed.^ 

The  measure  which  came  before  Congress  embodied  the 
President's  recommendations  as  to  maintenance  of  the 
roads  and  remuneration  of  the  companies.  It  added  pro- 
visions for  the  creation  of  a  "  revolving  fund  "  of  $500,- 
000,000  to  meet  the  expenses  of  Federal  control,  for  the 
issue  with  the  President's  sanction  of  new  securities  by 
the  roads,  for  the  optional  purchase  of  such  securities  by 
the  Government,  and  for  the  continuance  of  control  "  dur- 
ing the  period  of  the  war  and  until  Congress  shall  there- 

5  Ibid.,  Jan.  5,  1918. 
*Ibid.,  Dec.  27,  29,  1917. 


CONCLUSIONS   AND   COMPARISONS 


297 


after  order  otherwise."  At  the  same  time  Mr.  McAdoo 
came  to  an  understanding  with  the  heads  of  the  four 
important  railway  brotherhoods.  A  committee  of  four 
representative  men,  he  announced,  would  be  appointed  to 
investigate  the  relation  of  employes  to  the  railways  dur- 
ing the  period  of  Governmental  control  and  to  inquire 
into  the  demands  recently  presented  to  the  companies. 
The  findings  of  the  committee  as  to  wages  would  be 
operative  from  January  i,  1918.'^  This  fair  and  even 
generous  attitude  of  the  Government  toward  the  com- 
panies and  toward  their  employes  called  forth  many  ex- 
pressions of  approval  and  assurances  of  co-operation. 

The  assumption  of  Federal  control  over  railways  in 
the  United  States  was  not  uninfluenced  by  English  prec- 
edent. The  prompt  action  of  England  in  taking  similar 
steps  at  the  outbreak  of  the  war  and  the  satisfactory 
working  of  government  control  there  were  often  referred 
to  in  America.  The  motive  in  both  countries  was  the 
same,  the  imperative  war-time  need  of  an  efficient  trans- 
portation system,  unhampered  by  the  rivalries  or  restric- 
tions that  might  arise  under  a  system  of  competing  roads. 
The  measures  adopted  were  not  dissimilar.  In  England 
the  immediate  management  of  the  roads  is  left  with  the 
heads  of  the  various  systems  sitting  as  a  Board,  but  the 
final  decision  of  important  policies  resides  with  the  Presi- 
dent of  the  Board  of  Trade.  In  America  the  presidents 
of  the  roads  continue  their  individual  administration,  sub- 
ject to  the  direction  of  a  central  Board  of  selected  railway 

7  Ibid.,  Jan.  5,  1918. 


298 


WAR   TIME    CONTROL   OF   INDUSTRY 


executives,  already  experienced,  and  to  the  final  ruling 
of  a  Director  who  is  already  Secretary  of  the  Treasury. 
Financially,  too,  England  and  America  have  acted  on  the 
same   principle.     Both    Governments   guarantee    to    the 
roads  maintenance  of  equipment  and  remuneration  of 
stockholders.     In  England  the  remuneration  is  the  net 
profit  during  the  year  preceding  the  war,  in  America  the 
average  net  profit  during  the  first  three  years  of  the  war. 
In  England,  however,  the  Government  makes  no  pay- 
ments for  services  rendered  to  itself,  such  being  looked 
upon  as  a  return  for  profits  guaranteed.     In  America, 
book-keeping  is  likely  to  be  continued  in  the  usual  manner, 
the  expenditures  of  the  Government  and  the  services  ren- 
dered it  being  accurately  recorded.     In  America,  as  in 
England,  provision  is  made  for  the  investigation  of  de- 
mands for  higher  wages,  and  the  former  Government 
stands  ready,  as  the  latter  has  for  three  years  stood  ready, 
to  meet  the  reasonable  requests  of  employes.     In  all  es- 
sentials the  English  scheme  has  been  adopted,  and  this 
step  of  the  United  States  Government  is  perhaps  more 
closely  imitative  of  England  than  any  other  which  has 
thus  far  been  taken. 

At  the  end  of  1917,  however,  there  was  considerable 
likelihood  that  English  experience  with  the  coal  mines 
might  become  a  precedent  and  that  the  mines  of  the 
United  States  might  soon  pass  more  completely  under 
government  control.  As  in  the  case  of  the  railways,  the 
mines  of  the  latter  country  were  at  first  left  under  private 
operation.     Soon,  nevertheless,  a  measure  of  control  was 


CONCLUSIONS   AND    COMPARISONS 


299 


introduced  and  took  the  form  of  price-fixing.  Acting 
under  the  Food  Control  Law,  which  conferred  upon 
the  Executive  power  to  control  the  fuel  supply  of 
the  country.  President  Wilson  in  August  issued  price 
schedules  applicable  to  the  sale  of  bituminous  and  anthra- 
cite coal  at  the  mines.  The  prices  were  the  outcome  of 
investigations  carried  on  by  the  Federal  Trade  Commis- 
sion. They  purported  to  be  based  upon  the  actual  cost 
of  production  and  were  deemed  to  be,  the  President  re- 
marked, "  not  only  fair  and  just  but  liberal  as  well." 
Concurrently  with  their  publication  a  Fuel  Administrator 
was  appointed.  Not  merely  was  he  to  enforce  the  price 
schedules  but  he  was  to  supervise  the  distribution  of  coal 
and  the  operations  of  middlemen  and  retailers.  Very 
soon  there  was  enough  to  occupy  his  attention.  Pro- 
ducers complained  that  the  price  of  bituminous  coal  had 
been  fixed  too  low  and  would  compel  the  closing  of  the 
smaller  mines.  Consumers  complained  that  they  were 
being  charged  by  the  retailers  more  than  the  pit-head 
prices  would  warrant.  Retailers  complained  that  sup- 
plies from  the  mines  were  not  forthcoming.  The 
miners,  finally,  complained  that  their  wages  were  in- 
adequate and  demanded  higher  ones,  threatening  a  strike. 
How  the  price  for  bituminous  coal  was  advanced,  how 
retailers  were  restrained,  how  supplies  were  hurried  for- 
ward to  various  consuming  centres,  and  how  the  miners 
w^ere  given  higher  wages  constitutes  a  tale  of  considerable 
length.  Its  instructiveness  lies  in  the  demonstration  that 
an  attempt  to  regulate  an  industry  at  one  point  is  likely 


I 


300 


WAR    TIME    CONTROL   OF    INDUSTRY 


to  involve  the  regulation  of  every  part  of  it.  Pit-head 
prices  involve  the  cost  of  the  miner's  labour,  and  when 
this  has  to  be  advanced  under  threat  of  a  strike,  pit-head 
prices  must  be  revised.  On  the  other  hand,  a  close  watch 
has  to  be  kept  upon  the  middleman  and  the  retailer  to  see 
that  no  profiteering  creeps  in  between  the  pit-head  and 
the  consumer's  furnace. 

At  the  end  of  the  year  the  Fuel  Administrator,  Mr. 
Garfield,  told  a  Senate  Committee  that  more  extended 
control  of  the  coal  mines  would  be  inevitable  if  the  war 
continued,  and  that  he  himself  would  have  put  into  effect 
such  control  as  soon  as  he  took  office,  had  there  not  been 
danger  that  the  sudden  change  would  defeat  the  end  at 
which  he  aimed,  the  supplying  of  coal  to  those  who  needed 
it  most.^  Lack  of  transportation  facilities  increasingly 
complicated  the  situation.  It  was  responsible  for  a 
shortage  in  available  coal  of  20,166,442  tons  between 
August  28  and  November  24.  Some  immediate  relief 
was  got  through  priority  orders,  although  in  some  in- 
stances conflicting  priority  orders  seem  to  have  aggravated 
the  difficulties.  In  December  a  coal  famine  prevailed  in 
many  regions  and  the  first  task  taken  in  hand  by  the  new 
Director  of  Railroads  was  the  hurrying  of  coal  to  critical 
points.  That  such  a  situation  might  not  again  arise,  Mr. 
Garfield  formulated  a  plan  closely  modelled  upon  the 
English  one  of  September,  1917.  The  United  States  he 
proposed  to  divide  into  twenty  districts,  each  containing 
a  coal  producing  area  and  each  presided  over  by  an  agent 

•  Ibid.,  Dec.  27,  191 7,  p.  i. 


CONCLUSIONS    AND    COMPARISONS 


301 


of    the     Fuel     Administration.     Between    districts    no 
"  cross-hauling  "  should  be  allowed  and  each  agent  should 
see  to  it  that  coal  for  his  district  came  from  the  mines 
situated  therein.     Long  hauls,  it  was  hoped,  would  thus 
no  more  tie  up  cars,  and  the  reduced  freights  would  lessen 
prices  for  consumers.     Only  a  few  months  before,  the 
Controller  of  Coal  Mines  in  England  had,  in  order  to 
forestall  similar  difficulties  of  transportation,  mapped  out 
that  country  into  producing  and  distributing  areas.     That 
such  a  plan  might  be  introduced  into  the  United  States 
it  was  necessary  that  contracts  involving  transportation 
of  coal  between  points  in  different  districts  be  no  longer 
drawn.     On  December  2y,  accordingly,  the  Fuel  Admin- 
istrator issued  an  order  which  prohibited  contracts  that 
might  involve  "  cross  hauling,"  and  in  addition  provided 
that  no  contract  should  be  for  a  longer  period  than  one 
year,  that  the  prices  stipulated  should  not  exceed  prices 
fixed  by  the  Government,  and  that,  at  the  request  of  the 
Fuel  Administrator,  the  contract  itself  should  be  forth- 
with   cancelled.     Investigation    had    shown    that    prac- 
tically all  existing  contracts  would  expire  by  April   i, 
1918.     As  a  result,  the  new  ruling  would  by  that  date 
bring  the  distribution  of  coal  pretty  completely  under 
the  Fuel  Administration.     The  running  of  the  mines,  to 
be  sure,  would  still  be  left  with  the  owners ;  but  on  this 
point  Mr.  Garfield  told  the  Senate  Committee  that  the 
big  coal  operators  had  assured  him  of  their  readiness  to 
deliver  their  properties  the  moment  the  Government  asked 
for  them.     At  the  end  of  the  year,  therefore,  govern- 


302 


WAR   TIME   CONTROL   OF    INDUSTRY 


ment  control  of  the  coal  mines  had  already  passed  beyond 
the  stage  of  price  fixing  to  that  of  control  over  distribu- 
tion, with  a  prospect  that  complete  Federal  administra- 
tion was  not  far  in  the  future. 

England's  experience  with  coal  mines  and  miners  has 
been  more  grievous  than  that  of  the  United  States,  has 
been  distributed  over  a  longer  period  of  time,  and  has 
at  length  reached  its  logical  conclusion.  Complaints 
from  consumers  about  the  high  prices  of  coal  led,  in  the 
summer  of  191 5,  to  the  introduction  of  the  Price  of  Coal 
(Limitation)  Bill.  Before  it  could  be  passed  the  miners 
of  South  Wales,  demanding  a  new  and  liberal  wage- 
schedule,  precipitated  the  most  disastrous  strike  of  the 
war,  and  after  the  passage  of  the  bill  difficulties  did  not 
cease.  The  maximum  prices  established  had  to  be  in- 
creased, retailers  had  to  be  controlled,  and  miners  had  to 
be  further  propitiated.  At  length  the  miners'  demands 
rendered  the  situation  intolerable  and  early  in  19 17 
the  state  assumed  control  of  all  mines.  It  would  prob- 
ably have  been  better  had  this  step  been  taken  long  before 
it  was.  Once  in  control,  the  Government  proceeded  to 
regulate  the  distribution  of  coal  with  a  view  to  the  relief 
of  the  transportation  system,  and  this  measure  was  fol- 
lowed by  a  virtual  rationing  of  the  metropolitan  area. 

In  the  United  States  a  readiness  has  been  shown  to 
profit  by  English  experience  in  fixing  maximum  prices  for 
coal  and  in  establishing  production  and  consumption  areas. 
Without  doubt  the  American  Government  will  not  allow 
a  disturbing  labour  situation  to  arise.     Wages  in  certain 


CONCLUSIONS   AND    COMPARISONS 


303 


mines  have  already  been  once  advanced  under  Govern- 
ment persuasion  and  with  Government  assistance.  The 
complete  control  of  the  mines  which  England  has  found 
essential  would  forestall  any  difficulty  of  the  kind  and 
such  control  is  probably  foreshadowed.  Whereas  the 
prompt  action  of  England  relative  to  the  railways  has 
been  a  happy  precedent  for  the  United  States,  her  tardy 
action  and  resultant  misfortunes  relative  to  shipping  and 
the  coal  mines  may  well  serve  as  warnings.  In  the  case 
of  shipping  the  warning  has  not  been  without  effect,  in 
the  case  of  the  mines  it  is  not  likely  to  be. 

At  this  point  the  comparison  between  the  war-time  ex- 
perience of  the  two  countries  relative  to  the  control  of 
industry  may  be  concluded.     Despite  the  somewhat  dif- 
ferent circumstances  under  which  Great  Britain  has  often 
been  forced  to  act,  the  United  States  may  in  a  general 
way  learn  much  from  her.     The  control  of  many  food- 
stuffs, of  wool,  and  of  hides  has  in  England  been  pre- 
cipitated by  dependence  upon  foreign  sources  of  supply. 
America  seldom  has  to  face  this  difficulty  in  an  acute 
form.     If,  however,  for  various  reasons  a  shortage  in  the 
supply  of  foodstuffs,   wool,  or  hides  should  arise,  the 
experiment  of  stringent  governmental  control  has  been 
made  and  the  workings  of  it  are  observable.     Of  more 
immediate  value,  perhaps,  is  English  experience  in  the 
management  of  railways,  coal  mines,  munitions  works, 
and  organized  labour.     By  the  prompt  taking  over  of  her 
railways,  the  tardy  taking  over  of  her  mines,  the  efficient 
control  over  her  munition  shops,  and  the  statutory  co- 


304 


WAR    TIME    CONTROL   OF   INDUSTRY 


Operation  of  labour,  England  has  brought  great  essential 
industries  to  a  stage  of  efficiency  which  America  may  well 
be  proud  to  attain.  It  was  at  first  hoped  that  voluntary 
co-operation  in  the  United  States  might  achieve  what  in 
England  has  required  state  control.  This  hope  is  no 
longer  entertained  in  regard  to  merchant  shipping  or  the 
railways.  It  is  fading  in  the  case  of  the  coal  mines.  Its 
brightness  has  been  dimmed  by  the  introduction  of 
various  restrictions  upon  trading  in  foodstuffs  and  in 
wool.  It  persists  still  relative  only  to  the  production  of 
munitions,  the  conciliation  of  labour,  and  the  consump- 
tion of  food.  Always,  however,  as  the  hope  wanes,  the 
experiences  recorded  in  the  preceding  chapters  are  turned 
to,  and  the  wisdom  taught  by  them  is  carefully  pondered. 


INDEX 


Absenteeism  at  coal   mines,  63. 
Agriculture,   xiii,  249-268. 
Agricultural    Committees,    War, 

253,  256. 
Agricultural  machinery,  257-258. 
Agricultural  Wages  Board,  264- 

265. 

Arable,    conversion   to,   249-250, 

254-255,  267. 
Arbitration,  compulsory,  31,  52, 

54. 
Argentina,  105,  132-133,  i47,  184- 

185,  205. 
Armament  firms,  15. 
Australia,  106,  iio-iii,  147,  153, 

184,  205,  207,  254. 

Bacon,  195-197. 

Beef,  prime,  191,  cf.  meat. 

Beer,  217-219. 

Blue-book  rates,  xv,  141,  152,  157, 

206. 
Board  of  Trade,  i,  5-^,  yy,  210. 
Bonus,  war,  ix,  3-8,  70. 
Boots,  129  ff.;  standard,  138. 
Bread,  198  ff. 

Coal,  exportation  of,  64,  79-81; 
for  London,  12,  65-68,  78-79' 
96-100;  prices  of,  66-69,  77-85, 
90;  transportation  of,  12,  67, 
8I4,  300. 

Coal  and  Coke  Committees,  Dis- 
trict, 13,  80,  92. 

Coal  mines,  61  ff. ;  Controller  of, 
12,  ^z,  98-100;  output  of,  62- 
63,   93-95;    owners   of,   68-69, 

305 


71-72,  86-S8,  94;  in  the  United 
States,  298-301. 

Commission  of  Inquiry  into  In- 
dustrial Unrest,  52-59. 

Consumption,   economy   in,   xiii, 

64,  95-96,  173-177,  188,  211-232, 
276. 

Controlled  establishments,  30. 
Copper,  prices  of,  39-41,  277-27^. 
Corn  Production  Bill,  263-265. 
Costs,   conversion,  36,    108,    114, 
244. 

Cotton,  importation  of,  160-162; 
operatives,  29,  31. 

Defence  of  the   Realm  Act,  x, 
16,  82,  210. 

Dilution  of  labour,  29,  50-52,  56. 

Docks,  congestion  at,  9. 

Engineers,  Amalgamated  Society 
of,  49-51,  56. 

Engineers  and  Firemen,  Asso- 
ciated Society  of  Locomotive 
2,  6^. 

Exportation,    of    coal,    64;     of 
wool,  104-107;  of  steel,  42. 

Fertilizers,  252,  256. 

Food,    xii,    167-248;    waste    of, 

231-232;  cf.  prices. 
Food  Control  Committees,  179- 

180,  247. 
Food    Controller,    209-211,    179, 

221,  227,  242. 

George,  Lloyd,  as  Chancellor  of 
the  Exchequer,  15,  16,  20,  22  \ 


3o6 


INDEX 


as  Minister  of  Munitions,  23- 
34,  91 ;  as  Prime  Minister,  45, 
76-77,  83. 

Hides  and  leather,  xi,  129-139. 

Importation,  of  meat,  183-187; 
of  sugar,  170;  of  wheat,  198- 
207;  restriction  of,  150-151, 
159-162. 

India,  134-135,  200,  202. 

Insurance  for  shipping,  143. 

Labour,  ix,  2  ff.,  17  ff.,  31,  45,  48- 

60,  187,  260-261,  278-279. 
Laissez-faire,  Doctrine  of,  273- 

275- 
Leaving   Certificates,   x,   31,    53, 

56. 
Liquor,  22,  55,  217-219. 

Machine  tools,  15. 

Meals  Orders,  Public,  219-221, 
230. 

Meat,  xi,  147,  153,  181-197 ;  sup- 
ply for  the  army,  183-184. 

Military  Service  Act  (1916),  50, 

55. 
Milk,  237-240. 

Milling  Orders,  211-213,  216. 
Milner's   Committee,  Lord,  249- 

254- 
Miners,  xi,  29,  31,  69-77,  88-90, 

94- 

Munitions,  x,  14  ff.,  25  ff.,  35  ff. ; 
Ministry  of,  23  ff.,  43-47 ;  Vol- 
unteers, 32. 

Munitions  of  War  Act  (1915), 
X,  30  ff.,  Z7y  53,  72,-7(>- 

Paper,  150,  159. 
Passenger  traffic,  9-10. 
Periods  of  the  war,  vii. 
Potatoes,  233-236. 


Prices,  of  coal,  66-69;  of  food, 
168;  of  hides  and  leather,  130- 
136;  of  iron  and  steel,  39;  of 
meat,  184-193;  of  sugar,  171- 
174,  283-285;  of  wheat,  199- 
205,  241,  246,  265-266,  280;  of 
wool,  107-111,  114-115,  288- 
289;  maximum,  xii,  39-41,  168, 
172-173,  189-193,  232-246,  265- 
266,  280,  286-287;  minimum, 
250-251,  262,  280. 

Price  of  Coal  (Limitation)  Act, 
77-79,  84,  90. 

Priority    regulations,   43-46,    92, 
I 18-124. 

Production,  Committee  on,  17, 
19,  21,  54. 

Profiteering,  ix,  152,  154,  200-201. 

Prothero,  R.  E.,  190-192,  195,  254. 

Railways,  congestion  on,  9,  295 ; 

fares  on,  10;  state  control  of, 

I  ff.,  293-298. 
Railwaymen,  National  Union  of, 

Rationing,  of  coal,  97-99;  of  cot- 
ton, 160-162;  of  sugar,  179- 
181;  of  wool,  1 18-124;  volun- 
tary, 221-230. 

Runciman,  W.,  72,  7S,  210,  232. 

Shipping,  xi,  140  ff. ;  construction 
of  new,  164-165;  freight  rates 
for,  67,  80,  143-148,  153,  158, 
184-185;  losses  in  tonnage, 
163 ;  requisitioning  of,  147- 
149,  152-153,  157,  204,  291; 
profiteering  in,  151-152,  154, 
157. 

Shoddy,  use  of,  116. 

Speculation,  in  coal,  66 ;  in  hides, 
132,  134-135 ;  in  steel  and  cop- 
per, 41 ;   in  wool,  288. 

Stanley,  Sir  Albert,  6-8. 


INDEX 


307 


Steel,  exportation  of,  42;  prices 
of,  39  ff.,  277-278. 

Strikes,  5,  7,  18  ff.,  48-51,  68-77. 

Subsidized  bread,  245,  287. 

Sugar,  ix,  169-181 ;  Commission, 
Royal,  170,  173,  178;  consump- 
tion of,  173-177;  prices  of, 
1 71-174,  283-285. 

Syndicalists,  75. 


Tobacco,  159. 

Tonnage,  mercantile,  141,  163. 

Tractors,  257-258. 

Trade  unions,  x,  2  ff.,  18  ff.,  125  ; 

Advisory    Committee,    56-58; 

regulations,  29-33. 
Transportation,  economies  in,  9- 

13 ;  of  coal,  12,  67. 


Treasury  Conference,  20,  33. 

Wages,  3-«,  53,  55,  57,  70-76,  8&- 

90;  agricultural,  251,  263-264. 
War-bread,  211-217. 
War  Savings  Committee,  223. 
Wheat,  ix;   Commission,  Royal, 

205-208;    prices    of,    199-205; 

supply   of,    199-206,   209,   227; 

stimulus     to    production     of, 

250  ff. 
Whitley  Report,  54,  58. 
Wool,  xi,  loi  ff. ;  prices  of,  107- 

III,  114-115;  state  purchase  of, 

108-112,    125;    supply   of,    102- 

106 ;  in  the  United  States,  288- 

291. 
Women,  in  agriculture,  259;  in 

industry,  29,  34,  53,  55. 


Printed  in  the  United  States  of  America. 


T 


HE   following    pages  contain   advertisements    of   a 
few  of  the  Macmiilan  books  on  kindred  subjects. 


Cooperation  :  The  Hope  of  the  Consumer 

By  EMERSON  P.  HARRIS 

President  of  the  Montclair  Cooperative  Society. 
With  an  Introduction  by  JOHN  GRAHAM  BROOKS 

Cloth,  i2mo 

The  Failure  of  Our  Middlemanism,  Reasons  and  the 
Remedy,  Practical  Cooperation,  Background  and  Out- 
look, are  the  titles  of  the  four  parts  into  which  this  work 
is  divided.  The  author's  purpose  has  been  to  discuss 
cooperative  purchasing,  to  show  why  it  is  desirable,  to 
indicate  the  evils  which  it  reforms,  to  present  the  opera- 
tion of  a  cooperative  store  and  to  consider  the  difficul- 
ties which  must  be  overcome.  ''  Mr.  Harris  could  have 
chosen  no  happier  moment  for  his  message  than  the 
present,"  says  John  Graham  Brooks,  in  his  Foreword. 
"The  consumer  has  been  the  'forgotten  man.'  From 
big  business  down  to  obscure  quackeries  he  has  been 
fleeced  almost  without  protest.  Into  this  conspiracy  of 
ignorance,  wastefulness  and  sharp  practices  the  shock 
of  war  has  come.  The  awakening  is  rude  but  the  con- 
sumer has  got  the  stage.  Already  millions  of  us  are 
looking  back  wondering  at  the  slavish  acquiescence  with 
which  we  took  our  punishment.  We  are  most  amazed, 
perhaps,  that  we  should  have  submitted  to  methods  of 
secrecy  which  have  been  as  mischievous  in  business  as 
in  diplomacy." 


THE   MACMILLAN   COMPANY 

Publishers  64-66  Fifth  Avenue  New  York 


The  Foundations  of  National  Prosperity 

By  RICHARD  T.   ELY,  RALPH  H.   HESS,  CHARLES 
K.  LEITH,  AND  THOMAS  NIXON  CARVER 

Cloth,  8vo,  $2.00 


"A  most  useful  assembling  of  closely  related  problems  and  the  facts 
about  them  —  highly  stimulating  to  constructive  thought  on  some  of  the 
most  vital  issues  of  to-day  and  to-morrow."  —  Duluth  Herald. 

His  book  emphasizes  the  thought  that  conservation  is  to  be  regarded  as 
a  treatment  of  the  foundation  of  national  prosperity.  It  deals  with  the 
permanent  causes  of  the  wealth  of  nations.  The  titanic  war  struggle  in 
which  we  are  now  involved  makes  it  important  to  emphasize  the  fact  that 
in  conservation  we  have  to  do  with  national  preparedness  both  for  war  and 
peace.  There  is  danger  that  in  our  various  measures  we  may  direct  our 
attention  too  exclusively  to  the  needs  of  to-day  and  to-morrow,  whereas 
nothing  is  more  evident  than  that  this  preparedness  must  be  a  lasting  all- 
around  condition.  While  this  volume  treats  primarily  of  prosperity  and 
preparedness  from  the  standpoint  of  permanency,  it  also  has  lessons  for 
the  immediate  moment. 

Part  I  deals  with  the  more  general  aspects  of  the  subject,  bringing  it 
particularly  into  relation  to  economic  theory.  Conservation  policies  are 
considered  and  the  fact  that  these  are  chiefly  land  policies  is  brought  out. 

Part  II  discusses  the  relation  of  conservation  to  economic  evolution, 
showing  that  each  stage  in  economic  evolution  must  have  its  own  conser- 
vation policies. 

Part  III  gives  an  authoritative  presentation  of  the  minerals  which  play 
a  peculiar  part  in  conservation. 

And  part  IV  deals  with  the  human  resources  for  which  the  natural  re- 
sources exist.  This  section  is  critical  and  leads  to  a  very  careful  examina- 
tion of  remedies  for  social  evils,  because  it  looks  below  the  phenomena  of 
the  day  to  the  permanent  effects  of  our  methods  in  deaUng  with  human 
beings. 


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The  Food  Problem 


By  VERNON   KELLOGG  and  ALONZO  E.  TAYLOR 


%I.2S 


"  Food  is  always  more  or  less  of  a  problem  in  every  phase  of  its  production, 
handling,  and  consumption.  It  is  a  problem  with  every  farmer,  every  trans- 
porter and  seller,  every  householder.  It  is  a  problem  with  every  town,  state, 
and  nation.  And  now  very  conspicuously,  it  is  a  problem  with  three  great 
groups ;  namely,  the  Allies,  the  Central  Empires  and  the  Neutrals  ;  in  a  word, 
it  is  a  great  international  problem." 

These  sentences  from  the  introduction  indicate  the  scope  of  *'  The  Food 
Problem  "  by  Veinon  Kellogg  and  Alonzo  E.  Taylor. 

Both  authors  are  members  of  the  United  States  Food  Administration.  Dr. 
Kellogg  is  also  connected  with  the  Commission  for  relief  in  Belgium  and  pro- 
fessor in  Stanford  University.  Mr.  Taylor  is  a  member  of  the  Exports  Admin- 
istrative Board  and  professor  in  the  University  of  Pennsylvania.  The  preface 
is  by  Herbert  Hoover,  United  States  Food  Administrator  and  Chairman  for  the 
Commission  of  Relief  in  Belgium. 

The  food  problem  of  to-day  of  our  nation,  therefore,  has  as  its  most  con- 
spicuous phase  an  international  character.  Some  of  the  questions  which  the 
book  considers  are : 

What  is  the  problem  in  detail  ? 

What  are  the  general  conditions  of  its  solution  ? 

What  are  the  immediate  and  particulars  which  concern  us,  and  are  within 
our  power  to  affect  ? 

And  finally,  what  are  we  actually  doing  to  meet  our  problem  ? 

TABLE  OF  CONTENTS 

Introduction:  The  International  Problem. 

Part  I.     The  Problem  and  the  Solution. 

Chapter  I.  The  Food  Situation  of  the  Western  Allies  and  the  United  States. 

II.  Food  Administration. 

in.  How  England,  France,  and  Italy  Are  Controlling  and  Saving  Food. 

IV.  Food  Control  in  Germany  and  Its  Lessons. 

Part  II.     The  Technology  of  Food  Use. 

V.    The  Physiology  of  Nutrition. 
VI.    The  Sociology  of  Nutrition. 
VII.    The  Sociology  of  Nutrition  {Continued), 
VIII.    Grain  and  Alcohol. 
Conclusion  :  Patriotism  and  Food. 


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The  Soul  of  Democracy 


By  EDWARD  HOWARD  GRIGGS 


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What  at  bottom  does  the  war  mean?  Why  has 
it  been  our  war  from  the  beginning?  What  will 
be  the  effect  of  the  war  upon  our  social  philoso- 
phy and  upon  the  future  of  democracy?  These 
are  the  questions  which  this  volume  undertakes 
to  answer.  The  respective  values  of  democracy 
and  paternalism  for  efficiency,  endurance,  and 
finally  for  the  welfare  and  progress  of  humanity 
are  studied  in  a  series  of  vital  chapters  culminat- 
ing in  an  analysis  of  the  effect  of  the  war  upon 
socialism,  feminism,  religion,  education,  and  litera- 
ture. Those  who  have  heard  the  author's  public 
addresses  will  readily  realize  the  significance  of  a 
volume  embodying  his  whole  philosophy  of  the 
world's  struggle  with  its  effect  upon  the  future. 


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